There is no such thing as a free deficit
Over the last ten years, federal spending in the US has grown at an annual average of $170 billion dollars. Obviously, there is no way that this tendency could remain unchanged, and the recent debate among Republicans and Democrats shows that Washington has finally learned a lesson about fiscal sanity.
Milton Friedman used to say that “there is no such a thing as a free lunch”. We may now say that there is no such thing as a free deficit, either.
Obviously, this lesson was not taken very seriously by many politicians who have avoided time and time again a serious debate about spending cuts. Suddenly, Congressman Ron Paul seems to be the only man in Washington who has gotten this right for years now. His belief in lower federal spending and smaller government has anticipated a debate that is now more alive than ever before.
President Obama has announced an agreement between Democrats and Republicans just in time to avoid a government shutdown, but the debt problem will remain there. After all, how can an agreement to cut less than $40 billion dollars mean much next to a deficit of over $1,645 billion dollars?
The Economist has praised Congressman Paul Ryan, who chairs the House Budget Committee, for his “brave” budget proposal, which did tackle many of the problems with the current budget. However, the Washington establishment can easily swallow his effort and keep writing checks that may win votes, but ultimately condemn the nation to a public debt crisis similar to the one that many European countries are now facing.