Rein in Spending
It is imperative to keep government spending in check in order to restore skyrocketing economic growth. The importance of reining in spending is simple— the government gets all of its resources (money) from the private sector. All government spending is paid for by taxes, printing money, or running debt. One way or another, we are all paying for it. Milton Friedman’s saying is still true, “there is no such thing as a free lunch.”
The government takes away resources from the private sector (the engine of job creation), and redistributes them to fund its initiatives. As witnessed by the failure of President Obama’s massive stimulus package to ignite a real recovery, the government cannot compete against the private sector when it comes to job creation.
The private sector is a far better driver of job creation because the free market fosters competition. In order for a business to succeed, it has to produce a good or service that costumers want to buy. If customers are happy with their purchase, a business will be rewarded with the money they receive. If customers aren’t happy, the companies’ sales will take a hit and it may eventually be forced to close. Through this competition, unprofitable businesses are replaced by those who are best able to meet the needs of the American people.
In contrast to the private sector, when the government enters the marketplace it chooses “winners” who receive goodies such as tax subsidies or federal contracts. Since this money is awarded top-down from a bureaucracy, as opposed to bottom-up from the market, consumers do not ultimately decide which product or service is best. It’s for this reason that we want to keep government spending low. Remember, all of the money that the government takes in comes from the private sector, and the private sector is the engine powering job creation, and the innovative products that grow our economy.
Government spending remains a drag on our economy. Our national debt now tops $220,000 per American family— far above the average household income in the U.S. During President Obama’s tenure, the national debt has soared more than $7.5 trillion to surpass $18.0 trillion in total. Since President Obama took office, the federal debt liability has increased by more than $70,000 per family.
Even worse, the U.S. government has significant long term obligations. Unfunded obligations for Medicare and Social Security now hover around $49 trillion. With a national debt exceeding $18 trillion, it’s very important that candidates put forth a specific agenda on how they will rein in government spending.