Think of Gross National Product (GNP) akin to an apple pie. Currently, federal spending gobbles up 1/4 of the apple pie (25.3% of GDP). What the government spends means the producers of GDP cannot spend. We the People are left with less than 3/4ths of the pie.
Government spending works differently than the spending that individuals, families and corporations do. Private spending for goods and services grows the pie larger. In contrast, government spending eats from the existing pie and takes a huge cut from that pie.
When you and I go out to a restaurant that generates income to the cook and the farmer and the maker of stoves. When the government spends on existing entitlement programs (Medcare, Social Security, Medicaid) — which makes up about 40% of the budget — and to-come entitlement programs (ObamaCare) there is nothing created by government spending.
The Republican study Group wants to cap government spending at 18% of GDP. Republican Sen. Bob Corker of Tennessee has proposed a cap of 20.6% of GDP, the average level of federal spending over the past 40 years.
How much do We the People want the federal government to “eat” from the sweat, labor and hard work Americans do which comprises the Gross Domestic Product? Under Obama, the percentage grew from roughly 20 to 25%. That is a huge increase. How much should we shrink it? Why 20%? Why not 15%?
Individuals and families decide how much they want to spend and they have to live within a budget. All this talk about raising the debt ceiling does not make sense. If you and I max out our credit should we automatically get a line of credit so we can spend even more? No. And the same applies to the federal government.
Let’s hope that the Republicans that control the spending purse of the House hold steady. No more spending by the government until there are REAL spending cuts. Real spending cuts mean giving back the apple pie to the American people. Instead of eating a quarter of the pie, let the government shrink its percentage to 15% or less of the pie.
DrCameronJackson@gmail.com
