Tuesday, March 17, 2015

Government Deficits All the Way Up

A well-known scientist (some say it was Bertrand Russell) once gave a public lecture on astronomy. He described how the earth orbits around the sun and how the sun, in turn, orbits around the center of a vast collection of stars called our galaxy. At the end of the lecture, a little old lady at the back of the room got up and said: "What you have told us is rubbish. The world is really a flat plate supported on the back of a giant tortoise." The scientist gave a superior smile before replying, "What is the tortoise standing on?" "You're very clever, young man, very clever," said the old lady. "But it's turtles all the way down!"  —Stephen Hawking, A Brief History of Time
According the the scientist, it may be turtles all the way down, but with fiscal policy, the Congressional Budget Office informs us that for the next ten years, we can expect budget deficits all the way up.

Notice that the expected gap between spending and revenue widens as the years go by. This does not bode well for our economic future. Government spending is a tax of resources taken out of private hands and consumed by government bureaucrats. Such consumption hampers, not facilitates, economic prosperity.

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