Federal Government Spending Is Out of Control and Unsustainable. This State Shows The Way to Reduce Spending.

The Biden administration has increased federal government spending by a record $3.4 trillion since January 2021. That includes such signature bills as the American Rescue Plan Act of $1.8 trillion, the Inflation Reduction Act of $50.6 billion, and the Infrastructure Investment and Jobs Act of $764.9 billion.

As well as providing official costings for those bills, the Congressional Budget Office has found that a number of executive orders contribute nearly another $1 trillion of spending including college student debt cancellation, the end result being an additional $4.8 trillion to the net deficit.

To make a bad situation worse, there has since been the Consolidated Appropriations Act omnibus of $1.7 trillion which includes, until September 2023, $772.5 billion in nondefense discretionary spending, plus $858 billion in defense nondiscretionary spending.

In December 2022, the America First Policy Institute provided the top ten reasons to reject this omnibus. Three key points were

  1. The omnibus contains $15 billion in pork-barrel spending on over thirty-two hundred special lawmaker projects, which is swamp spending on steroids.
  2. Nondefense spending increases 9.3 percent from last year when the national debt is more than $31 trillion.
  3. The text of the omnibus is 4,155 pages long compared to the King James Bible of eleven hundred pages. Some members of Congress would be voting on this within two to three days.



As the political Left has so often preached, especially in the 2020s, context matters. The minor context is that it personally took this author all 365 days of 2022 to read the New King James Bible cover to cover. The major context can be seen in the above chart (from Downsizing Government), which shows that since 1970, actual spending reductions, not just slower growth, are—to say the least—few and far between.

Government Spending Harms . . . Again and Again

In his book Power and Market, economist Murray Rothbard wrote,

There are fundamentally two ways of satisfying a person’s wants: (1) by production and voluntary exchange with others on the market and (2) by violent expropriation of the wealth of others. The first method [is] termed “the economic means” for the satisfaction of wants; the second method, the “political means.”

The former means is driven by Say’s law which, in short, is the economic reality that markets “produce in order to consume.” In similar fashion, the latter means is driven by the political reality that governments “spend in order to control.”

Greater government spending by its very nature, scale, and scope reduces the private sector by diminishing

  1. wealth on both Main Street and Wall Street, respectively by extracting ever more goods and services and by crowding out debt and equity;
  2. liberty through greater regulation, taxation, and inflation, which grants monopoly and cartel power to big government and woke capitalists, respectively; and
  3. morality as businesses increasingly seek political privilege and consumers seek welfare from the state.

Don’t Look to Washington for Inspiration; Look to Maine . . . Yes, Maine

The Maine Policy Institute recently published the Maine Policy Budget, a landmark report for the lobster state largely modeled and written by this author. This blueprint did two main things (no pun intended) in terms of spending:

  1. Provided a budget methodology (based on regulatory economics and objective statistics) not just for slowing spending growth but for reducing actual spending over a reasonable period of four financial years
  2. Delivered an actual budget, based on official data and simple formulas, that will produce budget surpluses (taxes minus spending) over the course of over four financial years

The 2019 Maine Policy Institute report entitled Cracking the Code provided the essence of the Maine state budget problem:

Figure 8 [below] shows the difference between actual government spending and spending based on inflation from the FY 2005 budget to present. The results show that the current proposal would be approximately $7.06 billion, a difference of $973 million, if the increases over previous budgets had not exceeded inflation. This would be more than enough to fill the Budget Stabilization Fund to its maximum capacity and still have a surplus available for subsequent budgets. In addition, state government would be able to reduce taxes or implement other significant reforms that could help all Mainers.



continued here….

By Darren Brady Nelson Mises Institute. Reproduced with permission. Original here.