Since President Obama assumed office two and a half years ago, federal spending has accelerated at a pace without precedent in recent history, taking us from an already staggering $3.5 trillion in federal spending in 2010 to a projected $5.6 trillion within the next decade.
This is the financial equivalent of speeding against traffic on a superhighway. It's dangerous. It has to stop.
A household cannot become prosperous by spending all its money and running up a credit card bill.
Neither can a government or a country. Instead of putting the United States on a path toward economic recovery, the Obama administration's spending binge threatens to turn us into another Greece, a chronic debtor state teetering on the edge of bankruptcy.
The indicators are all equally alarming. Since the 1950s, federal spending as a percentage of GDP has hovered around 20 percent.
When President Obama took office, it shot up to 25 percent, a level not seen since World War II. Before the recession, the federal government spent $25,000 per household. That number has now soared past $30,000 and is on track to hit $35,000 within the next decade.
All this money has to come from somewhere. If President Obama stays in the White House for another four years, some of it will come from the higher taxes the administration is seeking to impose. The rest of it will have to be borrowed. Before Obama assumed office, our country's indebtedness was 40.3 percent of GDP. Current projections have it hitting 69 percent this year.
If anyone wonders why unemployment is stuck above 9 percent, and why some 25 million Americans are unemployed, underemployed, or are no longer looking for work, we should pause on that 69 percent figure. Every dollar that the government borrows for its operations is a dollar that cannot be invested in productive privatesector activity. Runaway federal spending crowds out private investment. At a moment when the public sector is flourishing as never before, it is unsurprising that the private sector has withered.
I have spent most of my life in the private sector, starting companies and turning around failing ones. What the federal government is doing today is a classic formula for ruin. I know how to set priorities and rein in costs.
In 2003, I became governor of a state hobbled by a deficit and shedding jobs as it came out of a recession. Working with a legislature under solid (85 percent!) Democratic control, I cut taxes 19 times, reformed and reorganized state government, and balanced the budget four years in a row. By the time I left office, Massachusetts employers were once again hiring, and the state had a rainy-day surplus of $2 billion.
The steps we must take to undo the damage inflicted by Barack Obama are as obvious as they are politically difficult. We must cut government spending, cap that spending at a sustainable level -- 20 percent of GDP is the target I would shoot for -- and pass a Balanced Budget Amendment to the Constitution. Cut, cap and balance are three words that are spoken far too rarely in Washington. But they embody my approach.
I will press for full repeal of Obamacare, which will save hundreds of billions of dollars. I will reduce the size of the federal workforce and align the wages and benefits of federal workers with the private sector. And I will set about the hard work of fundamentally restructuring the federal government.
Taxpayer money is today being used to underwrite a maze of rules, regulations and overlapping government agencies whose complexity defies the understanding even of those who inhabit the system. A first step in reform is acknowledging that the federal government cannot be everything to everyone.
There are many functions that the private sector can perform better than the public sector. Amtrak is a classic example. We can also use block grants to enable states to draw on federal resources while tailoring programs to their specific local needs.
That's how Medicaid should be handled. It is also precisely what I have proposed in a plan under which the federal government will spend $4 trillion less than what the Obama administration -- as detailed in its own mid-year budget projections -- plans to spend over the next decade. And $4 trillion is just a down payment on future savings to come.
Getting the federal debt under control in the wake of Obama's spending spree promises to be an arduous task. The good news is that Americans have awoken to the problem. The even better news is that the American people have always known what Washington can't seem to learn: we cannot spend our way to wealth.