Ebeling on Obama and Fiscal Irresponsibility

President Obama is hosting a “fiscal responsibility summit” on February 23 that has the goal of reining in the projected growth in government spending in the years and decades ahead. Any such reform, however, will require a dramatic change in the role of government in American society...

Even before the stimulus package was passed earlier this month, the Congressional Budget Office was estimating that the Federal government’s budget deficit for the current fiscal year would be at least $1.2 trillion. If we now add the hundreds of billions of dollars in additional government spending in 2009 due to the stimulus bill and the bailout for bankers, automakers, homeowners, Washington could be facing a budget deficit this year that approaches $2 trillion. This would be equal to two-thirds of the entire Federal budget in fiscal year 2008...

The Treasury and the Trust Funds use a 75-year time horizon in their projections. They estimate that the current present value of unfunded liabilities for both Social Security and Medicare over the next three-quarters of a century totals nearly $43 trillion. Social Security makes up $6.6 trillion of this amount and Medicare costs comprise the remaining $36.3 trillion...

In 2008, the Gross Domestic Product (GDP) of the United States was around $14 trillion. This means that government would need to have sitting in an account collecting interest a sum equal to three years of U.S. GDP. Obviously, Uncle Sam does not...

After all, in his inaugural address on January 20, President Obama said: “The question we ask today is not whether our government is too big or too small, but whether it works — whether it helps families find jobs at a decent wage, health care they can afford, a retirement that is dignified.”

In other words, our new president takes for granted that it is the role and responsibility of the government to paternalistically provide decent paying jobs, medical care and retirement pensions for the entire population of the United States. And he clearly had no interest in or concern with broader political philosophical questions of whether government is “too big” versus “too small.”

His premise that government has these interventionist and redistributive roles to play in society define the terms of the debate in his mind. The Federal government is to be an even larger Welfare State than at present; the only issues open to debate are figuring out ways it can fulfill this role in a more effective and cost-efficient manner, if possible...

This can only come about by asking the questions that President Obama has taken off the table: What are the individual rights and responsibilities of the citizenry for their own personal affairs? What are the limited and legitimate functions of a government in a free society? And how is that proper balance between individual liberty and constitutionally restrained government to be restored?

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