Talk of a federal spending freeze sends Democrats into fits of hysteria. But history shows that it can be done without any dire consequences. Cato’s Chris Edwards makes the case for a spending freeze in National Review.
While the budget deficit is expected to continue falling until 2015, it will then start rising again. The problem is excessive spending, not a shortage of revenue. Consider that if Congress simply held total spending to this year’s level of $3.5 trillion, the budget would be balanced by 2016 as the growing economy generated rising tax revenue.
Freezing entitlement spending would be tough to do, so it makes sense to pursue structural reforms to these programs to reduce growth in spending rates. But with discretionary spending, a hard freeze makes sense — and this is where our early history is instructive. From the founding of the nation until entitlements were invented in the 1930s, the whole budget was “discretionary,” and during extended periods spending was held flat.
Let’s start with President Thomas Jefferson. He and his Treasury secretary, Albert Gallatin, were appalled at the rise in federal debt under the prior Federalist government, and they vowed to reduce the burden. From 1801 to 1809, they succeeded in keeping federal spending at around $10 million. They cut debt from $83 million to $57 million.
Jefferson and Gallatin’s attack on debt and their relatively frugal budgeting influenced federal policy for decades. The federal budget was roughly balanced or in surplus every year from 1800 through 1836 except for five years around the War of 1812.
Wars have always been budget busters that push up spending and debt. But before the 1930s, responsible legislators rebalanced the books and restrained spending for long periods during peacetime. The Jefferson-Gallatin rule was simple: Freeze total spending and use natural revenue growth to generate surpluses and pay down the debt.
Read the whole thing. There’s no reason they shouldn’t be able to freeze spending and bring down the debt. Oh, except that they just don’t want to. They’re fine with a national debt of $17 trillion and counting.