Once upon a time not so very long ago, France represented the dominant global power on earth. Yet along with their enviable overseas empire, trade, and monuments at home went massive runaway spending. In fact on the very eve of the French revolution back in 1788, France’s national debt had grown so huge that the government spent a mind-boggling 50 percent of all tax revenues on only its interest to their creditors.
Even though they were quickly sinking, the government of France could not manage to slash spending. Their beloved social welfare projects alongside the expensive military simply could not be touched. The runaway spending continued at a blinding pace in 1788 as the government exceeded its national tax revenue by fully 20 percent. Revolution ensued the very next year.
Fast forward to the year 2017, 230 years later, and you see much the same irrational irresponsibility going on throughout the modern world. There are a whole handful of nations engaging in the same reckless behaviors. This is not only the likes of Greece that have become so bankrupt that they cannot cover essential public services any longer. The nation with by far and away the least sustainable government finances proves to be the U.S.
The American Federal government’s fiscal year just concluded for 2017 last week. In 2017 per the Treasury, the U.S. government brought in $2.95 trillion in tax receipts. Add to this their $62 billion in interest earned on government student loans and another $16 billion from the Department of Justice seizure programs, and you come up with over $3 trillion in American Federal government revenue in just one year.
If this seems like a huge sum of money, it is. This represents a larger amount than the collective Gross Domestic Products of the 130 poorest nations on earth. Yet the Federal government spent $4.1 trillion on the budget for the year. It meant that they had to borrow another $671 billion and throw it on the mountain of debt which now exceeds $20 trillion.
The same was the case back in the 2016 fiscal year. In neither year were their significant recessions, financial crises, major wars, or bank bailouts to pay for either. They were both simply normal business as usual years. Yet despite these ordinary fiscal years, the Feds handily overspent by almost a trillion dollars and managed to spend on runaway costs greater than revenues by over 20 percent, almost exactly like the French back in 1788.
Imagine these numbers if there were significant recessions, banking crises, or major wars to fund? Consider too that it has been not just years, but decades, that this has been going on in the Untied States.
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If you listen to economists, you will hear a bunch of inventive improbabilities. They claim that we can borrow ourselves out of debt, spend past recessions, and live as if consequences do not exist from printing trillions of dollars in paper currency from nowhere. They will feed you lines like, “debts don’t matter since we owe the money to ourselves.” Does defaulting on your own citizens as a government make it somehow okay? Yet people accept such ridiculous and far-fetched lines as if they were Gospel truth.
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