Inside the beltway, discussion of President Obama's proposed budget for fiscal year 2012 has provoked the "Sturm und Drang" that we have come to expect in the polarized partisan atmosphere that predominates in Washington.
The President maintains that his $3.7 trillion proposal – which would produce a $1.6 trillion deficit this year (the largest since WWII and a whopping 11% of the economy), is a model of fiscal responsibility and should be adopted by the Congress with dispatch. The Republicans – who have heretofore shown themselves constitutionally incapable of addressing the runaway train that is Medicare, Medicaid, and Social Security – accuse the President of a lack of leadership for refusing to suggest cuts in the entitlement programs that threaten to sink the Ship of State.
And so it goes: The partisans bandy data back and forth seeking to gain political advantage without actually having to come to grips with the fact that behemoth budgets are choking the vitality out of the economic engine that was once the envy of the world.
Meanwhile, out on the hustings, the eyes of ordinary Americans glaze over as politicians throw out numbers that have 12 zeros after them. The magnitude of these figures is incomprehensible to workers who are just trying to hang on to their jobs and make it in a marketplace that has been damaged by the recent economic meltdown. And as for the data relied upon by the politicians for their positions, they can't help but think of what Mark Twain said about "lies, damned lies, and statistics."
While discussions about the national budget may seem arcane to ordinary Americans, they would do well to keep in mind some budgetary principles that impact not only their financial future, but their freedoms as well.
Principle Number 1: The Size of Government is Directly Proportional to the Amount of Money Available to It.
Money is to government as food is to human beings. The more we eat, the fatter we get. At a certain point, size becomes a liability, not an asset. We become bloated, ponderous, unhealthy, and unresponsive. The same is true for government. We are well past the day when the federal government was lean, efficient, and responsive. It has become a bloated behemoth that is ponderous, inefficient, and unresponsive. If we want to shrink government, we have to put it on a diet. That means limiting the amount of money that is available to it. It's that simple. It may not be easy, but it is simple. Disciplined dieters lose weight, but it takes willpower. Do we have what it takes to shrink the size of government? If not, it is the American people who will be the Biggest Loser.
Principle Number 2: There is an Inverse Relationship Between the Size of Government and the Scope of Freedom. As Government Expands, Freedom Contracts.
Taxes are to government as calories are to people. Lots of tax money is necessary to sustain a big government. The money used to feed the American government comes from the American people. When the government requires more of our money in taxes, less is available for the people. With less money in their pockets, they have fewer choices available to them. They have less freedom to make decisions than they had before the government took their money. And as government grows bigger and bigger on a steady diet of tax money, it occupies a bigger and bigger presence in the lives of its citizens, thereby limiting their freedom even more.
Principle Number 3: Freedom and Security are Not the Same. Real Freedom Includes the Freedom to Fail.
Much of the money in our national budget is spent to insulate people and corporations from the consequences of their own conduct. A classic example is the TARP program, which was designed to immunize large corporations from the consequences of their profligacy. The rationale for the program was that some companies are simply "too big to fail." The result, however, is that, spared from the natural consequences of their own conduct, these companies are likely to repeat the conduct that required them to be bailed out in the first place.
Most people learn from their mistakes, and in doing so, profit from them. Experience often is the best teacher; thus, when we suspend the Law of Natural Consequences, rescuing people from their failings, they are likely to repeat them. If we are to be a truly free people, we must be free to fail… and to suffer the consequences of our failure. A nanny state which protects its citizens from womb to tomb – insulating them from their failure to plan for their financial futures, protecting them from the consequences of their bad choices – guarantees that its citizens will continue to make mistakes. And in the process, it will bankrupt its citizens by robbing those who succeed to protect those who fail.
So, while the debate about our national budget may sound boring and arcane, the outcome of that debate has huge implications for everyone, and not just for our financial future. Nothing less than our freedom is at stake in the resolution of the current budget debate. Here's hoping that the American people and their elected representatives have the discipline and determination to do what's right.
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