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I think that when we look out with our underfunded liabilities and our national debt over $14 trillion, I think if we are part of that movement to get our government spending under control, I think that would be a tremendous legacy to leave.
Some doomsayers think the collapse will be triggered by runaway government spending, excessive taxation, oppressive regulation, food shortages, fuel shortages or natural disasters such as deadly pandemics or lethal changes in the world's climate.
Government spending is being restrained, the economy is making progress and moving forward, and the pro-growth, tax cutting policies put in place have allowed businesses to grow, which has brought in additional tax revenue to help pay off the debt.
Having said that, I believe we must not compound the natural disaster of Katrina by creating a fiscal disaster in Congress - it is our duty to ensure that we reign in other government spending in any event, and especially in this time of national emergency.
MoveOn loves government. It remains enamored of government spending as fuel for its liberal agenda; and anything that threatens to close that spigot in any degree is perceived as a dire threat - worthy of Chicken-Little warnings that the sky is going to fall.
In reality, every time the government takes an additional dollar in taxes out of someone's pocket, it's a dollar that person will not be able to spend or invest. When government spending goes up, private spending goes down. There is no net effect. No wealth creation.
Increased government spending can provide a temporary stimulus to demand and output but in the longer run higher levels of government spending crowd out private investment or require higher taxes that weaken growth by reducing incentives to save, invest, innovate, and work.
I stand with everyone who is sick of hearing about Washington cutting insider deals to their friends in business, politicians failing on their promises to fight increases in government spending, and more costly and complicated rules from Washington that make everyone's lives harder.
The stimulus legislation, technically known as the American Recovery and Reinvestment Act of 2009, was a mixture of tax cuts for families and businesses; increased transfer payments, like unemployment insurance; and increased direct government spending, like infrastructure investment.
In a very weak economy, when you say 'cut government spending,' what you mean is you're laying off school teachers and you're de-funding various programs that put money into the economy. This means you have more unemployed people that then draw unemployment benefits and don't pay taxes.
The basic idea that if you increase government spending or you cut people's taxes that stimulates the economy and lowers the unemployment rate, is a very widely accepted idea. It's in every economics textbook, that's what we teach our undergraduates, and I certainly try to teach them the truth.
If the U.S. Government was a company, the deficit would be $5 trillion because they would have to account by general accepted accounting principles. But actually they encourage government spending, reckless government spending, because the government can issue Treasury bills at extremely low interest rates.
Government is taking 40 percent of the GDP. And that's at the state, local and federal level. President Obama has taken government spending at the federal level from 20 percent to 25 percent. Look, at some point, you cease being a free economy, and you become a government economy. And we've got to stop that.
The story of Detroit's bankruptcy was simple enough: Allow capitalism to grow the city, campaign against income inequality, tax the job creators until they flee, increase government spending in order to boost employment, promise generous pension plans to keep people voting for failure. Rinse, wash and repeat.
The question is: How do we reduce spending from 25% of GDP, which is where Obama put us? The focus is on total government spending. Can we bring it down, in a reasonable and politically acceptable way? That's what the Paul Ryan plan does. It puts us on a gradual reform path to reducing the size of government.
What's hurting the U.S. economy is total government spending. The deficit is an indicator that the government is spending so much money that it can't even get around to stealing all of the money that it wants to spend. But the tip of the iceberg is not what hit the Titanic - it was the 90 percent of the iceberg under water.
If you have a private firm and you spend a ton of money to pay employees, but what you produce is a flop, there will be no value to GDP. But government spending all gets counted as contributing to economic growth. That's why in the early days of creating these measurements, some people didn't want to count government spending.
What I'm not saying is that all government spending is bad. It's not - far, far from it, but there is no free lunch, as a former colleague of mine used to say. There is no public tooth fairy. Father Christmas does not work on the Treasury staff this year. You can never bail someone out of trouble without putting someone else into trouble.
After the $700 billion bailout, the trillion-dollar stimulus, and the massive budget bill with over 9,000 earmarks, many of you implored Washington to please stop spending money we don't have. But, instead of cutting, we saw an unprecedented explosion of government spending and debt, unlike anything we have seen in the history of our country.