Let’s Control Our Government

November 11, 2015

In recent days, Congress has raised the National Debt Ceiling once again. The new ceiling of $20+ Trillion probably will not be hit until 2017, after the next election. No surprise there, as Members of Congress have proven to be cowards yet again.

A rising National Debt implies a continuing Budget Deficit. The size of the Ceiling rise implies an acceleration in the Deficit, as pork barrel spending will be used to help current Members get reelected. When I was a kid, this was called corruption. I’m not sure why it is not called corruption today.

So, what’s so bad about running a Deficit?


  • The US Economy is made up of two sides: the Government side and the Private, Productive Sector side. The Government side, almost by definition, involves spending which the Private, Productive Sector would not do. The Government side takes money from those individuals and businesses which have earned it, to give to those individuals and businesses which haven’t earned it.

By its very nature, Government spending is less productive – less valuable – to the whole Economy than spending by the Private, Productive Sector, even though official GDP numbers give them the same weight.

Since Government spending is less valuable, and directly reduces the Private, Productive Sector, every Dollar spent by our Government reduces the US Economy – increased Government spending makes every American, rich, poor, and in between, less well off. Government spending makes us all poorer.

  • Government spending, since it takes money away from the Private, Productive Sector, this side of the Economy is less able to grow. Real GDP growth during the Obama regime has been dead flat according to the official fairy tale numbers. GDP growth has averaged only about 2% during the last generation or two, compared to growth of around 3.5% before 50 years ago. An Economy growing at 2% a year will double in size in 36 years. In 36 years, an Economy growing at 3.5% will grow to be almost 3½ times as big. Out-of-control Government spending (and Over-Regulation) has robbed all Americans of that extra 1½ times of GDP growth. All Americans would have been 75% more well off (3.5 times vs only a double) with previous relatively low spending levels than we are with the “drunken sailors” in Congress, in just the last 36 years.
  • Continuing Deficits and a growing National Debt need to be financed, which takes even more resources away from the Private, Productive Sector. They encourage the Government to print more Paper Dollars, which reduces the value of all the Dollars which you and I have saved. Deficits and a rising Debt level are embarrassing, so there is a government urgency to screw with the official numbers, making them look not quite so bad. The Private, Productive Sector works best when the data it uses is accurate. It works best when the money supply is not being inflated. It works best when the Government leaves it alone to do its thing. Bigger, more expensive Government make all Americans poorer.

  • If GDP is dead flat, as it has been during the Obama years, and the US Population grows, then each American alive today has a claim to a smaller portion of that GDP. The per-capita GDP has gone down. Even by the Government’s manipulated figures, All Americans are poorer because of our Government’s activities.

In past essays, I have proposed several “Action Items” to help reduce Government Spending. I’d like to recount some those here.

  • No Bill shall be introduced, voted on, or passed which is over 50 pages in length. If the Sponsor can’t say what he wants within 50 pages, then he doesn’t know what he wants. This also means no more last minute “Ear Marks” to buy a Congressman’s YES vote.
  • No Member of Congress may vote YES on a Bill unless he can attest that he has read the Bill. He may vote NO or may ABSTAIN. ObamaCare was just one example of a Bill passed without giving Members of Congress time to understand what they were voting on.
  • Both Houses of Congress must send every Bill (and every amendment to that Bill) to a Constitution Committee, whose job is to show – specifically – where in the US Constitution every provision of the Bill is authorized. Both Houses shall hear/read public comments and must respond to each one of them in their report to their respective Houses.
  • A Constitutional Amendment shall be passed to Balance the Budget. It could include salary sanctions for the top brass of all three branches of our Government if the Budget is not balanced during any year. The Limit shall apply to both Annual Spending and to Un-Funded Liabilities.
  • A Constitutional Amendment shall be passed to Pay Off the National Debt over a set number of years (perhaps 20), with a specific timetable.
  • A Constitutional Amendment shall be passed to place a Dollar Limit on Government spending, perhaps 10% above Government spending during the year it’s ratified. This will be an effective way to prevent further debasement of the Dollar. (A constant Dollar allows for more Government spending than a depreciated Dollar.)
  • A Constitutional Amendment shall be passed to require the Federal Budget to meet GAAP accounting rules, including Un-Funded Liabilities.

Our Government is supposed to work to increase the well-being of all Americans, not to make all Americans poorer.

Robert (Bob)  Shapiro is self-taught in Austrian Economics and has consulted briefly for the governments of Mexico, Greece, Portugal and Spain. He has traded Gold & Silver and their stocks since 1970. Bob Shapiro’s blog is http://us-issues.com

The word ‘silver’ originates from the Old English Anglo-Saxon word 'seolfor'