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The Nation's Pulse
Big Government’s Moveable Feast
Today we finally stopped paying for government. Soon we’ll be paying for it into December.
For once the American people appear to be undertaxed. Fiscal crisis is all around us. Yet Tax Freedom Day came on April 9 this year, about two weeks earlier than in 2007. Congress is spending us blind, bailing out virtually every person, business, government, and other entity known to man, yet our tax burden is down. Such a deal!
Of course, there’s a small catch. Uncle Sam is borrowing $1.5 trillion this year.
Which means the formal tax level understates the true burden of government. By a huge amount. Alas, Big Government is Big Government, whether financed by taxes or bonds.
And the situation is going to get worse, much worse, before it gets better.
Given present plans, Uncle Sam will run up another $10 trillion in red ink over the coming decade. But that’s just the start. If President Barack Obama’s health care takeover is not reversed, taxpayers will be liable for trillions more in new spending. The claim that the program is all paid for — indeed, that it will reduce the federal deficit — is the sort of fantasy that only a Democratic congressman could believe.
And additional bailouts are flooding our way. Fannie Mae and Freddie Mac continue to lose money. The FDIC is shutting down banks at a record rate. The Pension Benefit Guaranty Corporation’s fund is under water.
Then there are Social Security and Medicare. The former is spending more than it is taking in right now. Over the long term these two programs alone are underfunded by $100 trillion, a fiscal tsunami which no amount of administration double-counting can disguise.
Nor is the problem only spending. Regulation also is up. Health care already was one of the most regulated industries. Obamaesque “reform” is going to make Americans pine for the “good ol’ days” when not every medical decision was subject to the dictates of some bureaucrat somewhere. Financial “reform” will have a similar effect. The only sure beneficiaries of the new legislation are the regulators who are empowered to do most anything to most anyone with a vague connection to financial services.
But, why worry? Our taxes are down.
Actually, the American people are worrying. Which is why Democrats also are worrying, but for a different reason. The public wants to know who is going to pay the bill the Democrats have been running up. The Democrats want to know how they can fool the public into voting for them again.
The people won’t be fooled if they read the latest Cost of Government Day report.
If you want to know the real burden of government, add up government spending and regulation. That makes August 19 Cost of Government Day — meaning Americans spent 231 days working to pay for Uncle Sam and 51 mini-me’s in the states and the city of Washington, D.C. That’s almost two-thirds of the year.
The latest report was written by Benjamin Pacini of the Center for Fiscal Accountability, a project of Americans for Tax Reform. It makes for somber reading.
At August 19, COGD is eight days ahead of last year. Alas, COGD in 2009 was up nearly a month from the year before, when Americans quit paying for government on July 16.
THE PROBLEM IS BIPARTISAN. During most of the last decade the Republicans pushed up COGD slowly if irregularly. And the Bush administration shares the blame for 2009, during which government’s burden jumped the most ever. Unfortunately, this just created a new base from which Democratic policymakers could impose an even higher burden on the rest of us.
About the Author
Doug Bandow is a senior fellow at the Cato Institute. A former Special Assistant to President Ronald Reagan, he is the author and editor of several books, including The Politics of Plunder: Misgovernment in Washington (Transaction).
Letter to the Editor View all comments (14) | Leave a comment
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Ken (Old Texican)| 8.19.10 @ 7:39AM
Doug, thanks.
How did Texas come in using your figures?
Maddox| 8.19.10 @ 8:05AM
Government has won unless we do something.
The choices are few.
Petronius| 8.19.10 @ 9:46AM
People do not care how heavily their wallets and purses are taxed so long as their minds are not.
frank| 8.19.10 @ 5:05PM
the people you speak think their wallets are bigger than they really are...and for the most part are too stupid to figure out how much they really pay in taxes, i.e. effective tax rate vs. how much they think they pay.
Conan the Contrarian| 8.19.10 @ 10:46AM
It seems to me that the Bush-Clinton-Bush era is the problem, especially Bush 43. Shame on Congressional Republicans for shilling for GWB. What a disaster he was. And, no, I don't miss him yet. Bandow is right. Bush 43 gave the Dems a platform to shoot the moon. If we get a GOP president in 2012, he won't do diddley squat to help us. He will wring his hands in fear of being called mean, racist, etc., if he should try to cut the budget. I have no faith in the future. We are doomed. Maranatha.
Clinton nee Publius | 8.19.10 @ 11:36AM
In the 16th century, Europe was a feudal society. The workers of the day were serfs who were tied to the land they worked. They had a plot that was theirs that they farmed, but their feudal lord got a third of their economic output and the serf was bound to work the lord's lands for free one day a week and harvest the lord's crops.
So if the serf had to give one day a week, that's 52 days a year for the lord's fields.
If you add to this the planting and harvesting this adds another two weeks, less the days - so another 12 days.
This means the serf gave 64 days labor to the lord - his state.
The serf also gave a third of his output to the lord and that means 121 days worth of labor also went to the lord.
This means the serf's "total tax" was 185 days of his labor output per year was going to the state.
Feudalism was ended because it was unfair and exploitative in nature. The economic rights were all with the landed gentry (their ruling class) and the workers were shafted with supporting the gentry (like we do today).
Today we spend 231 days paying our due to government and the serfs from the 16th century had a better deal.
That is liberalism people.
frank| 8.19.10 @ 5:08PM
95% of all american households earn less than $100,000/yr and 70% of all american households earn less than $70,000 per year. if you do the math, the 231 days is grossly overstated.
Tony in Central PA| 8.22.10 @ 9:14PM
In the words of Friedrich Hayek, " Serf's up ! ".
Peronius| 8.19.10 @ 8:28PM
The issue here is not just income taxes. Add to it sales, excise, property, use, utility, imputed intangible investment taxes, licenses, and permits.
And after government at all levels takes that money that we earned it returns to us nothing but insults and abuse.
Sam| 8.20.10 @ 12:31AM
The greater problem are the American people who believe in this guy and believe that he is just another politician. He is not! Americans have got to get their heads out of the "good life" syndrome and get to work filling their heads with American history, government, and the Christian ethic and morals that made this country great.
Appleby| 8.20.10 @ 3:27AM
As we say in Kanukistan, ITS ALL ABOUT THE GOODIES. As long as more than half the hoi polloi believes it is getting something for nothing -- that it can have everything it wants right now and somebody else will be forced to pay, the driverless bus will continue on its trip over the cliff with partying proles on board. Come up and spend some time in Kanukistan, most particularly in Ontario, and you will see the shape of the future.
Joanna | 6.6.11 @ 4:42AM
What an interesting article- I hope to read more like this, thanks!UTI Treatment