The Wisconsin Policy Research Institute

We Shouldn't Mistake the Medicine for the Disease

By George Lightbourn

Billion is the new million. Just when we were almost able to wrap our brain around how much a million dollars is, the federal government shifted gears and began tossing around billion. In Washington, a billion dollars used to be a big deal, but no more. Now it’s the norm. The danger is that the federal “illion” lexicon stands to convert serious issues into fantasy.

Take for example, the fact that the federal government closed last year with a $455 billion deficit. Next year we’re told to expect the deficit to be somewhere “close to $700 billion.” I personally have no idea what might be close to that fantastic thing, that $700 billion. It’s so large. Maybe there’s someone at Princeton or at NASA who can understand it. It must be like a quark or a black hole.

But what we do understand about government finance is that government owes us. They owe us our Social Security checks and they owe us Medicare. They owe us tax rebates. They owe us not one but two wars and they better take care of that nasty bank liquidity problem so we can sell our houses for what we know they are worth. They owe us more for education, more for research into alternative fuels and more for veterans. And do not forget, they owe us lower taxes.

Most of us don’t give the U.S. budget ten minutes of thought, and we shouldn’t. In the past, when our government racked up huge deficits, things always seemed to eventually get better. Economic growth put the train back on the tracks. This time around, the problem is bad enough that it is nearly impossible for us to grow our way out of the hole we keep digging.

You see, one of the largest drags on the economy will be the federal budget deficit. We like to think all of this spending as the medicine that will treat our disease. But the reality is that all of this spending is actually the disease.

As a nation, we have freed ourselves from the puritanical notion that we shouldn’t spend money we don’t have. That is how we conduct our personal finances and that is how our government conducts its finances. We want it all and we want it now. And if you can’t give it to us, we will vote for someone who can.

But when we look beyond the fog of the billions, anyone can see that the whole system is rotten. We deny ourselves nothing and, next week we will elect people who support our habit. Yet, when we are honest with ourselves, we cannot see how the system is sustainable. It is not.

Serious people – both conservatives and liberals - who study our government and its spending habits will tell you that the hole we have dug ourselves is so deep that we cannot expect economic growth to right the ship of state. The folks from the Heritage Foundation and the Brookings Institute say that we not only have to increase taxes, but we have to cut back on benefits. They have run the numbers and the numbers tell a grim tale. What if we choose to ignore these spoilsports?

Unfortunately, we are about to find out.

-October 27, 2008

We Shouldn't Mistake the Medicine for the Disease

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