By Shawn Ritenour
Once again there is panic running through the halls of Congress, the Oval Office, and in the chattering classes that make up mainstream media, over the government shutdown and the debt ceiling. Most of the panic is a result of the inability of politicians to reach an agreement on government spending. If we hope to begin to recover true prosperity, then making real, significant cuts in government spending should be a top priority. Only true, substantial reductions in government spending will free necessary capital for entrepreneurs to use in productive investment. This investment, in turn, will allow for sustainable economic progress.
We are in the fiscal mess we are in because, since the early 1970s, tax revenues have been unable to keep pace with government spending. Real government spending has increased almost twice as fast as government revenue. In 1970 our total government debt equaled $371 billion. Today it stands at $16.8 trillion. Even if we adjust for inflation, federal government debt has increased more than eight times what it was in 1970.
Things have only gotten worse following the financial meltdown of 2008. It took from 1789 to 2001 to accumulate a federal debt of $5.8 trillion. However, our government officials have added a nearly identical $5.8 trillion in four short years between 2007 and 2011.
The 10 highest monthly budget deficits have all occurred since February 2009. During the Obama administration, the federal government has accumulated more new debt than it did from the time that George Washington became president to the time that Bill Clinton became president. Since President Obama entered the White House, the national debt has increased by an average of more than $64,000 per taxpayer.
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