Federal spending addiction is stifling economic freedom

By Rod Blum

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If we check our political ideology at the door and look at the facts, the problem becomes pretty clear. Let's roll the clock back to 2001, a short 11 years ago when we had a budget surplus.

Federal government revenues have grown to $2.5 trillion from $1.9 trillion in 2001 - a 27 percent increase even in the midst of a recession. However, spending by the federal government has skyrocketed to $3.6 trillion from $1.86 trillion in 2001 - nearly a 100 percent increase. Where would a sane citizen say the problem lies?

Federal government has a spending addiction. And to add insult to injury, the money it spends doesn't even belong to us because 43 cents out of every dollar Washington spends is borrowed from places such China. Can you imagine if your household borrowed almost half of what it spends every year? Patently insane.

I would propose we roll back federal spending to pre-Obama, pre-stimulus levels of 2008, which was $3 trillion. This represents a real reduction in spending of about $600 billion. These cuts should be implemented over a three-year period so the reduction of government spending in the overall GDP can be replaced by growth in the private sector.

We should freeze spending at this level until revenues catch up and we have a balanced budget. We also should make permanent the Bush tax cuts and permanently repeal the death tax. The non-partisan Congressional Budget Office estimates the budget would be balanced in just three years. And since the career lawyer politicians have shown they can't be trusted, I support a balanced-budget amendment.

Government cannot tax-and-spend a nation to prosperity. If it could, Greece and Italy would be economic powerhouses. All prosperity comes from the private sector. All government spending represents about 40 percent of GDP - this trend needs to be reversed.

We need to send people to Washington who have a spine and can occasionally say: “No, we can't afford it.”

Regarding job creation: Most citizens understand that government doesn't “create” anything. To “create” something, the government must take resources from one group and give them to another - this is a true “zero sum” game.

Entrepreneurs in the private sector create real jobs, real wealth and real prosperity.

Economic freedom is the key. This is proven - not just an economic “theory.” Look at the various indexes that correlate economic freedom with economic growth.

The healthiest economies are those with the most economic freedom. Unemployment is low in these countries - 4 percent in Hong Kong, 2 percent in Singapore, 5 percent in Australia. Sadly, today the U.S. places 10th, behind Ireland. Countries with the least economic freedom have few real jobs and no prosperity.

Government does have a role to play by creating an environment whereby job creators, like myself, can thrive and expand. That does not mean crony capitalism and subsidization of favored industries. If Congress truly wishes to have a hand in creating jobs, legislators will take to heart the lessons Ronald Reagan taught us in 1980: lower taxes, decrease regulations and implement a strong dollar policy for all business, not just a favored few.

As the Iowa Entrepreneur of the Year in 1994, I can confidently say: Get the government out of our way and let us chase our dreams. This is the key to job creation.

Rod Blum is a Dubuque business owner who created Digital Canal, a provider of homebuilding and structural engineering software. Comments: rblum@digitalcanal.com