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Following Europe Will Lead To Collapse

In the Eurozone Spain is bracing for yet another round of painful austerity as a result of its unsustainable debt. These cuts will cripple entitlement programs that people built lives around, they will cause a spike in unemployment, and put the national security of its people at risk. This is the path big government takes you down; ballooning debt, then a crash where the bottom is not discernable.

Then why does this administration feel that the best way to fix our problems at home is to follow the same path that Europe has? Our budget deficit continues to balloon with no signs of stopping or slowing down. Historically when a nation’s debt reaches 90% as a share of GDP, economies will stagnate. Currently we are at 70% and will hit 90% in under 10 years.

This is unacceptable and can be avoided by adopting the Contract for America’s terms to pass a balanced budget amendment. This amendment will ensure spending does not accelerate at the rate it currently is and spending growth will be capped as a percentage of GDP.

Until this amendment is passed, politicians will continue to tax and spend faster and faster. When money is not coming physically out of their pockets they see no reason they can’t spend it. American government deficit spending needs to stop immediately.

End Runaway Government Spending

Impose a statutory cap limiting the annual growth in total federal spending to the sum of the inflation rate plus the percentage of population growth. (Mark Meckler, Sacramento, CA)

SUMMARY

Since 2001, federal spending has grown 51 percent faster than inflation, and now stands at $29,813 per household. President Obama’s budget could push real federal spending above $37,000 per household by the end of this decade. Taxpayers clearly cannot afford to fund this level of spending.

Families and businesses are tightening their belts and capping their spending. Yet Congress is not subject to any statutory spending caps. Entitlement programs such as Social Security and Medicare grow 7 percent annually on autopilot with no Congressional oversight. Discretionary spending is budgeted annually (at growth rates recently averaging 8 percent), yet Congress bypasses even those minor restraints by declaring any additional spending “emergencies.”

The only way to force lawmakers to set priorities and make trade-offs is to enact a law capping the growth of the federal government to the inflation rate plus population growth (approximately 3.5 percent annually). No more blank checks, no programs on autopilot, all programs competing against each other for tax dollars. Any additional spending should require a 2/3 supermajority vote (which should be reachable during a real emergency). Such a spending cap – starting from the pre-recession 2008 spending levels – could likely balance the budget by 2020 without tax increases. It’s a vital step towards protecting the family budget from the federal budget.

~ Brian Riedl, Heritage Foundation