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Happy Cost of Government Day!

Posted By Rebecca Hagelin On 07/17/2008 @ 12:00 am In Commentary | Comments Disabled

Congratulations: The rest of your 2008 paychecks belong to you and your family. Enjoy!

Oh, you didn’t hear?

The “mainstream” media probably didn’t tell you, but July 16 was this year’s “Cost of Government Day.” As Americans for Tax Reform notes, that’s the date on which the average American has paid his share of the financial burden imposed by the spending and regulation that occurs on the federal, state and local levels.

And just think: It only took you a little over half a year to do it.

I wish I could say things are improving on the government-cost front, but they’re not. This year’s date is four days later than it was in 2007 (July 12), and 17 days later than the “Cost of Government Day” notched as recently as 2000. In fact, COGD has fallen later than July 16 only four other times since 1977.

Something’s clearly out of whack. And we know what it is – the free-spending ways of our elected officials in Washington. As Americans for Tax Reform notes in its report on Cost of Government Day, “The driving factor for this development is the fact that all components of the cost of government – federal spending, state and local spending, and regulation – are now increasing faster than national income.”

Unfortunately, the solution isn’t merely to get politicians to stop spending like teenagers equipped with their parents’ credit cards (although that would help). The fact is, the amount of money spent by Washington is already on track – automatically, without politicians lifting a finger – to go through the roof in the years ahead.

The reason? Our national entitlement programs are set to expand rapidly. According to researchers at The Heritage Foundation:

These middle-class retirement programs, Social Security, Medicaid and Medicare, will cause federal spending to jump by half, from 20 percent of the economy to 30 percent by 2035. This tsunami of spending is a major threat to limited government because it runs on autopilot with automatic increases locked in by each program’s governing laws. While other programs are constrained through annual budgets, entitlements get first call on resources. Other goals such as defense or national security must compete for an increasingly smaller share of what’s left. This “locked in” spending is steadily undermining the economic future of younger generations, who face a debt burden of $175,000 per person. The moral and ethical challenge from the entitlement tsunami is undermining our democratic system as more Americans become dependent on the government and other priorities are automatically pre-empted.

For years, Heritage and others have warned policymakers in Washington about this gathering storm. And for just as long, those warnings have fallen on deaf ears. Yes, a few brave individual politicians here and there have raised a cry for action. But too many preferred to look the other way. Spooked by political fears (and sometimes because of plain laziness), they’ve kicked the entitlement can down the road, hoping it would become someone else’s problem.

The problem is, that day of reckoning – when the “Big Three” entitlement programs make spending on any other national priorities virtually impossible – is practically here. The baby boomers are retiring, and the tax burden is shifting to the smaller generations behind them. We’ve got to start addressing this problem now, before it gets even worse.

Fixing it won’t be easy. But once we’ve discarded the “third rail” mentality that has kept us paralyzed politically for years, we can take action. Solutions include raising the retirement age (Social Security, after all, was conceived when life expectancies were lower) and targeting low-income seniors more effectively. And as Heritage’s Brian Riedl notes, “In the long run, a more generationally equitable system would add a Social Security option in which individuals set aside money for their own retirement that they own themselves.”

Whatever the exact solution, it’s clearly time to get involved. Tell others about this grave crisis that threatens to affect all of us. At Heritage, we’ve made it easy for you to spread the word: Go to alegacyofdebt.com to order a free DVD of a 12-minute program called “A Legacy of Debt.” You also can download materials that will help you host a screening of the program for your friends and neighbors.

For too long, we’ve tried looking the other way. It doesn’t work. Only by getting large numbers of people involved, at the community level will we finally get Washington policymakers to take notice – and get busy.

Of course, it won’t be easy to get them to fix things. But it sure beats celebrating Cost of Government Day on Christmas.



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