There's no such thing as free money

  • 7 August 2019
  • NormanL

We've been writing a lot about government debt and spending in recent months because official Washington appears to have given up any lingering pretense to fiscal restraint. This spending spree will end in tears because, as Stephen Greenhut writes, there's no such thing a meaningless debt, or free money:

Sorry, but deficits and debt do matter. There’s no short-term crisis, for sure, but debt “will depress economic growth over time and could potentially lead to a fiscal crisis if borrowers lose faith in the country’s ability to pay,” explained Yuval Rosenberg in The Fiscal Times. Furthermore, he notes, debt hampers government’s ability to react to real emergencies “such as recessions, wars or natural disasters.” As debt soars, federal payments to service the debt will crowd out the government’s core spending responsibilities.

It’s morally reprehensible for current lawmakers who, to quote Limbaugh back when he was concerned about such things, are spending so recklessly “that it is destroying the future of your kids and grandkids.” That’s the key point. You could borrow an immense amount of money to upgrade the kitchen and take Hawaiian vacations and then claim that it doesn’t matter as long as you can cover the monthly interest payment. But that’s a road to eventual ruin.

Some debts can’t be helped – e.g., capital expenses – but look at the nonsense that our massive federal budget is funding. Easy debt drives easy spending. It enables our government to do things it shouldn’t do, such as wage unnecessary wars and create boondoggles like the Green New Deal or a space force. Deficit spending creates constant pressure for tax hikes.

Our current federal fiscal path is morally reprehensible. It has been for many years, regardless of which political party is in control. The ultimate power to change this course, however, rests with voters. Until they demand fiscal responsibility, Congress will continue to spend and debt will continue to rise. And those future generations who will get the bill for it all? They will have every reason to wonder why we did nothing to stop it.