Government Spending: Why it Needs to Change

April 29, 2012
By Anthony Ciccarello BRONZE, McDonough, Georgia
Anthony Ciccarello BRONZE, McDonough, Georgia
1 article 0 photos 0 comments

Today, the government of the United States of America spends massive quantities of money. The highest percentage of this money goes towards Social Security. The next largest program is national defense. Other major targets of government spending are Medicare and other health programs, transportation infrastructure, government employment, and, of course our tremendous, rapidly accumulating debt. The amount of spending accumulated by our government in the course of a year is staggering, and despite our attempts to pay it off, our national debt is still increasing. If we continue down this road, disaster is inevitable.

American government spending has increased steadily throughout our history. The Founding Fathers wanted to keep the federal government small, believing that a large government would quickly lead to tyranny. President Jefferson was a particularly avid believer in small government; he cut government spending and nearly halved our already significant national debt. During Jackson’s administration, the federal government was, for the first and only time, out of debt. Even after the Civil War, government spending remained minimal, mainly focused on the military, postal service, and a pension system for Civil War veterans. The Great Depression ended the pattern of a slow increase in government spending; instead, it grew rapidly. Massive public works projects designed to create jobs and new social programs were invented in an effort to end the Great Depression. This influx of government money was wasted, for the economy did not recover. As the United States prepared to enter World War II, the government spent even more money, now on weapons, tanks, aircraft, and the other materials necessary to the war effort. While this surge in production was necessary to success in the war, and incidentally finally ended the Great Depression, it pushed the government debt to all-time highs. This debt has steadily increased since then, and is now in the trillions of dollars, a staggering amount. Policies to end the current recession mirror those used during the Great Depression, with similar amounts of spending and lack of success. The federal government has borrowed so much money that its credit rating has been downgraded. Obviously, our government has gotten into a bad habit of spending far more than it earns, a habit that can only have disastrous results.

In the private sector, numerous individuals and businesses have gone into debt. Of course, there are consequences for these actions. Businesses that go into debt are forced to declare bankruptcy. This means that they are no longer able to, or have to, pay their debts. This has repercussions that can be felt throughout the entire economy. Banks these businesses owe money to are no longer able to collect the money they invested in that business. If they lose enough, the bank will be forced to close as well. This results in a loss of money for those who had their money stored in the bank. This chain reaction continues, crippling the entire economy, starting a recession, or even a depression. If a handful of major businesses going into debt can have this much effect, how much more dangerous is an entire government? Of course, people face real-world consequences when they spend more than they earn. By buying a fancy new car and a large house when they only have enough for a small apartment, people can also contribute to an economic downturn when they can no longer pay their loans off, as seen in our most recent recession, which started in the housing market. These people, who may now have no money and no house, could become homeless or even commit suicide in their despair. Consequences do exist for people and businesses who fail to balance their budgets. The same is inevitably true for governments who overspend their income.

The scenarios for what will eventually happen to a debt-ridden country are frightening to consider. At best, future Americans will be forced to pay the price for our mistakes as taxes steadily increase so that we can pay off our staggering debt. Doubtless, that is a cost no one wants their children to pay. Still, other potential outcomes are worse. Much of the American debt is owed to China, a country whose policies are much at odds with our own. At any moment, they could call on America to pay its debt, most likely causing a complete economic collapse. Estimates on this collapse range as high as predicting that it will make the Great Depression seem like a time of prosperity, with unemployment probably reaching seventy percent or higher. In the wake of such a disastrous economic collapse, political ruin would soon follow. Another possibility is simply that China could effectively control American policy by threatening to call in our debt. Invariably, this would reshape the world, replacing republics with tyrannical regimes like China’s. Alarming as these scenarios are, other possibilities exist; some that may be even worse than these. As Greece’s example has shown, governments can go too deeply in debt, and with trillions of dollars in the negative range, how long will it be before consequences result for the American people as a whole?

The spending of the American government is increasing and our debt has already achieved unprecedented levels. If this pattern continues, catastrophic results will inexorably follow. Young Americans today will have to pay the cost of generations of wasteful and excessive spending. Is this what we want for our country? Our government needs to establish a balanced budget, come to a consensus on what is truly necessary (and not just the wants that we think we need), and begin to pay off our substantial debt, and this needs to happen very soon. Otherwise, terrible consequences are bound to follow.

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