Government Spending. Except that is a misnomer. We should be calling it Government Borrowing, because that is exactly what it is. On the other hand... maybe it should be called "government stealing," because they are stealing our grandchildren's livelihood! It is impossible to become wealthier by borrowing every year for generations, and yet the central bank and our brilliant bar-tending, foul-mouthed elites in Congress seem to be convinced of the positive effects of government borrowing, or more accurately, government creation of inflated dollars. I don't think that even John Maynard Keynes imagined never-ending deficit spending, yet here we are!
American families that become wealthy spend less than they earn, and save what they don't spend. Yet the prevailing argument is that government is immune from those basic tenets because it can create demand with monetary policy, and that will grow the economy. Obviously government can't run out of money, but that pesky little thing called inflation is the unavoidable and economy-destroying result of running the printing presses or, nowadays, simply creating more digital funds.
Treasury Secretary Scott Bessent told Breitbart News exclusively that President Donald Trump’s administration is “laser-focused” on cutting the deficit and getting spending “under control,” part of his larger vision of “reprivatization” of the U.S. economy so economic growth is no longer dependent on government spending but instead on private sector growth. Bessent said he joined Trump on the campaign trail last year and later joined his cabinet because he was “so alarmed” by the “high level of government spending” that had taken hold in recent years.
This is why President Trump and his team are disruptors. They are not content simply to slow the rate of increase of government spending/borrowing. They understand two things.
First: the size of the government budget requires borrowing...forever! That is ultimately untenable, and will destroy our economy. The budget must be cut. There is no other option.
Second: Government spending is inherently less efficient at growing economies. In fact, based on our experience over the last two generations, it is obvious that government spending retards organic economic growth, by crowding out investment and inserting a chaotically inefficient system that rewards rent seeking and outright fraud. Government must shrink, and be removed from competition for investment dollars.
Getting control of the budget will yield immediate results, as the financial markets recognize that more private investment funds will be available. Will there be short-term shocks? Of course. Those financial markets are dependent on a constant stream of government dollars created to fund the deficit and pay bond interest. And there will be uncertainty as the Trump administration formalizes its tariff plans. But when future government spending and borrowing is better understood, and the tariffs are set, business will be able to plan for the future with much more certainty.
But the biggest change will be that government will not be competing as much for investment dollars, and will not be crowding out innovation and entrepreneurialism. Simply unleashing Americans from the tethers of a huge and all-encompassing government will go a long way toward correcting the imbalance of government vs. the private sector.