Posted February 7, 2018 2:23 pm by Comments

By Walter Williams

Federal spending has exceeded 20 percent of the GDP for most of that period. Because federal spending is the problem, that's where our focus should be.
Federal spending has exceeded 20 percent of the GDP for most of that period. Because federal spending is the problem, that’s where our focus should be.

U.S.A.-(Ammoland.com)- Some people have called for a balanced budget amendment to our Constitution as a means of reining in a big-spending Congress. That’s a misguided vision, for the simple reason that in any real economic sense, as opposed to an accounting sense, the federal budget is always balanced. The value of what we produced in 2017 — our gross domestic product — totaled about $19 trillion. If the Congress spent $4 trillion of the $19 trillion that we produced, unless you believe in Santa Claus, you know that Congress must force us to spend $4 trillion less privately.

Taxing us is one way that Congress can do that. But federal revenue estimates for 2017 are about $3.5 trillion, leaving an accounting deficit of about $500 billion. So taxes are not enough to cover Congress’ spending. Another way Congress can get us to spend less privately is to enter the bond market. It can borrow. Borrowing forces us to spend less privately, and it drives up interest rates and crowds out private investment. Finally, …Read the Rest

Source:: AmmoLand

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