The Personal Cost of Spending
The White House says that the government will spend $3,766,000,000,000 in 2010.
What does that number mean to you and me? Absolutely nothing. It is way too large to comprehend. However, if we break this number down per person it begins to make sense and you might not like the results.
$3,766,000,000,000 in government spending is roughly $12,000 per person in the country.
In order to pay for this, government will collect $2,264,000,000,000 in taxes. This amounts to $7,300 per person.
This sounds like a good deal, right? On average, you’re paying (on average) $7,300 and the government is spending $12,000.
The reality is that the missing $4,700 per person is not free. This overspending will have to be paid for at some point. There are two options for making up the difference: cutting spending or raising taxes. Cutting spending makes far more sense economically – the government often spends money very inefficiently and provides poor services (think of the DMV). Raising taxes would have a very negative effect on the economy – this would decrease people’s and businesses’ incentive to work, save, and invest.
Besides, most people would probably not want to pay $12,000 for $12,000 in government. Can the government spend your money more effectively than you can?
The bigger problem: all of the previous years in which government has overspent and never collected the money to pay for it. That overspending amounts to $39,700 per person. At some point in the future, this liability will have to be paid off. In the meantime, Washington’s voracious appetite for spending must be restrained in order for our country’s economy to grow robustly and create sustainable jobs.