Thursday, 11 June 2009
May Deficit Was Nearly $190 BillionWritten by Steven J. DuBord
The Treasury Department reported on June 10 that the federal budget deficit for May was just shy of $190 billion, and the total deficit eight months into the fiscal year is approaching $1 trillion.
These totals reflect how deeply the federal government is drowning in red ink. The exact figure for May is $189.7 billion, and the yearly figure with four months left is $991.9 billion. This $991.9 figure is more than triple the deficit of $319.4 billion reached at this time last year. The administration estimates the total deficit for the whole fiscal year will reach a record $1.84 trillion.
Of course, the rising deficit has many contributing factors: interest on the deepening national debt, bank and corporate bailouts, Obama’s economic stimulus package, decreased tax revenue due to unemployment and hard times for businesses, and increased outlay for unemployment compensation and food stamps. Year-to-date government spending hit $2.37 trillion, approximately 18 percent more than for the same period last year. Government receipts totaled $1.67 trillion, approximately 18 percent less than at this point last year.
What is to be made of all these blood-red numbers? One very important thing to realize is that they are the price of allowing government to go beyond the limits set forth in the Constitution. Nowhere does the Constitution authorize the federal government to give $700 billion in taxpayer money to failing banks and corporations, and nowhere does it authorize government to take ownership of them. The Constitution does not authorize dishing out $787 billion in “stimulus payments” when the economy gets tough. Take away these unconstitutional outlays and the deficit would be reduced by about one-and-a-half trillion dollars, canceling out most of the projected $1.84 trillion deficit.
But this can be taken a step further. What if the one-and-a-half trillion dollars had never been confiscated from taxpaying individuals and businesses to begin with? What did America gain by losing $700 billion in tax money to government and allowing government to throw it at failing institutions which had proven themselves incapable of managing these sums of money? One could say that “We the People” did gain majority ownership in an automobile manufacturer, but that is not much consolation.
What would have been a better “economic stimulus” than for the entire economy to have retained $787 billion in the first place? The government hurt those who rightfully earned that money and “stimulated” those who had no right to it. The harm done to those who paid the money more than cancels out the supposed good done to those who received it. The only other benefit, if it can be called that, was to give government officials the chance to make back-room deals to decide who should be stimulated.
The federal government’s self-destructive deficits will never be properly addressed until Americans decide to return government to its constitutional limits. Some may lose a convenient benefit, but everyone would gain from lower taxes, less-intrusive regulations, and more freedom.