President Donald Trump’s order to pause almost all federal grants and loans that do not go directly to (or, like student loans, directly for the benefit of) an individual, was likely illegal, at least for spending whose recipients are specifically authorized by Congress. Trump has since rescinded the order. But it should also be a massive wake-up call to tens of millions of Americans who haven’t understood the pervasiveness of federal funding of …well, almost everything.
While I won’t go as far as some who say that all taxation is theft, I do argue that all federal taxation to fund spending not authorized by the Constitution is theft. Furthermore, all spending is taxation. And so very much of our federal spending is extra-constitutional, and yet it has persisted even when Republicans are in charge.
The reaction to, and news stories about, the potential impact of the Trump spending freeze show just how far we are from fiscal sanity.
Yesterday, my city’s major newspaper, the Denver Post, ran a long (and quite good) article entitled, “Trump’s now-blocked federal spending freeze sends Colorado officials scrambling, with billions at stake.” Here’s a sample:
Much of Colorado’s $40 billion state budget as well as its hospitals, universities, early childhood programs, research laboratories, and other agencies and groups rely on federal funding for day-to-day operations. It wasn’t immediately clear how President Donald Trump’s attempted freeze, should it go into effect, would ripple through the state or affect residents’ access to services.
But early analysis from lawmakers and officials at the federal, state and local levels projected broad impact, from environmental programs to regular government funding to major capital projects reliant on federal grants.
Colorado’s governor, Jared Polis, widely believed to harbor presidential ambitions, put out a statement on Tuesday that included, “This indefinite pause in Congressionally appropriated federal funding hurts children and hardworking families, jeopardizes American jobs and businesses, harms hospitals and safety net health providers, threatens road and bridge repairs, and impacts countless other programs.”
That may be true, but it begs the question (a phrase generally used incorrectly) of the proper role of government. And it raises questions of fiscal management, erosion of federalism, and national bankruptcy.
Why is the federal government in a position to “harm hospitals” or “hurt children” with a pause on financial flows? How is such a stream of money not dammed off by a combination of constitutional restrictions and politicians, particularly Republicans, who have claimed for my entire lifetime to believe in “fiscal responsibility”?
The answers are myriad and complex, but I’ll offer one: As Public Choice Theory suggests, politicians are not selfless and focused on the greater good; they’re as self-centered as anybody else (at least) and focused on winning their next elections. One of the easiest ways to do that in a system that, unlike individual states, can run budget deficits, is to get your name on a new building or bridge or road, or claim that you “got something” for constituents.
If you really want to seethe, take a look at Sen. Rand Paul’s (R-KY) 2024 “’Festivus’ Report on Government Waste.” How about $12 million for a “pickleball complex in Las Vegas”? Or $3 million for “Girl-Centered Climate Action” in Brazil? Or almost $11 million that the Department of Defense gave the University of Pittsburgh where researchers “sliced open the backs of male cats to expose their spinal cords then inserted electrodes which fired off electric shocks while the incision was still open to make cats have an erection”?
The problem, of course, is that not only do members of Congress function as muggers to support this profligate behavior, but they turn us into a nation of muggers. These politicians are like a criminal who, with a gun in your chest, takes the $100 you have in your wallet but tells you to feel good about it because he’s giving half to charity. That’s bad enough. But what spending on a project in Las Vegas or Pittsburgh does is it turns those residents into thieves of the current or future incomes of people everywhere else in America. So, naturally, those of us in Colorado then think, “If we have to fund projects in Pittsburgh or Peoria or Panama or Pensacola, we’re damn well going to get ours too. We’ll make people in other states fund our projects; It’s only fair.”
And here we are.
It’s true that fixing our fiscal situation will require addressing our massive national Ponzi schemes known as “entitlements.” Paul Ryan, much reviled by today’s MAGA wing of the GOP, was the last prominent Republican to have the courage to say Social Security and Medicare must be reformed (such as by slight increases to the retirement age, done in a way that doesn’t impact current enrollees or even those close to retirement age). Donald Trump campaigned explicitly against entitlement reform, which is why he’s very hard to take seriously as a champion of the thing this country needs most, spending cuts.
Still, the terror caused by Trump’s paused pause demonstrates that even aside from those massive government programs there are savings to be had. There is far too much dependence by cities and states on federal money, money that we must always remind ourselves will be claimed from our children and theirs rather than from the spineless big-spending creatures who have inhabited Congress and the White House for the last generation.
It’s past time to start saying no to federal programs, new and old, that fund programs that are the responsibilities of state and local governments while quietly eroding the financial foundation of the country. If they’re not a high enough priority for those governments to fund, why should we fund them by impoverishing future generations (and the future might be sooner than you think)?
The federal government has become a drug pusher, but the drug isn’t heroin; it’s money, and the national equivalent of the overdose we’ll inevitably suffer is the theft our children’s future incomes and our country’s standard of living. We are a nation of addicts in denial. The freakout in response to the Trump pause was the first tremor in national DTs.
We currently run federal deficits that would be high even as efforts to “kickstart the economy” during a recession; running them during a period of strong growth is economically suicidal and the result of today’s politicians buying votes and admiration with our nation’s and our children’s future. The reaction to Donald Trump’s threatened “pause” in much federal spending should cause all Americans to ask their members of Congress, “do we really need to be doing this?”
