But Americans must soon face a greater crisis: We have a built a government we cannot afford.
Three studies published this year put some perspective on just how big our government has grown, and how much bigger it could grow in the near future.
Every year, the Tax Foundation puts out a report on Tax Freedom Day, the day Americans stop working for the government and start working for themselves. The foundation has a simple formula for figuring when this occurs: It determines what percentage of the total national income is consumed by local, state and federal government in taxes. It then calculates how many days equal the same percentage of a 365-day year.In 2008, government will tax away 30.8 percent of the national income. An equal percentage of the year is 113 days. That means Americans were compelled to work from Jan. 1 to April 23 of this year just to pay taxes.
That is more than six times as long as Americans worked a century ago to pay taxes.
In 1909, according to the Tax Foundation, total taxes absorbed 4.9 percent of national income. That meant Americans only had to work until Jan. 19 to cover the combined levies of government. They worked almost all year for themselves.
By 1940, on the eve of World War II, government had more than tripled. That year taxes equaled 17 percent of national income. Tax Freedom Day came on March 7.
By 1945, when World War II ended, government was taking 24.2 percent of national income. Tax Freedom Day did not come until March 30.
This trend of government taxing away an ever-larger share of the national income did not stop after the war. The postwar era saw some ups and downs in the trend, but the long-range trajectory was up.
Government, the Tax Foundation notes, is now the most expensive thing in our lives. "Americans will work longer to pay for government (113 days) than they will for food, clothing and housing combined," says the Tax-Freedom-Day report. "In fact, Americans will work longer to afford federal taxes alone (74 days) than they will to afford housing."
Federal government is a heavily mortgaged McMansion burdening us all.
In fact, because it is based only on tax revenue and does not include deficit spending or the cost of regulation, the Tax Freedom Day calculation does not even reflect the entire cost of government.
This month, Americans for Tax Reform released its own report on the "Cost of Government Day" that attempts to do so.