Government Spending

Veronique de Rugy | 11.8.2024 10:45 AM

Elon Musk has thrown down a $2 trillion gauntlet, claiming he can slash federal spending by that amount. While the billionaire's proclamations on X often generate more heat than light, one can only hope he will succeed.

The real question isn't whether we can cut $2 trillion from a bloated $6.8 trillion federal budget—we absolutely can. After all, the government managed to function at $4.4 trillion five years ago, and American civilization didn't collapse. The economy was humming, wages were rising, and poverty was falling.

The fact that it's feasible, however, does not mean Musk will actually succeed. Before Washington's army of spending defenders, many of them Republicans, starts wailing about draconian cuts, let's discuss the actual question: how to trim the fat without harming the muscle.

Theoretically, one of the most straightforward budget-cutting approaches is an across-the-board or uniform-reduction rule. There is plenty to cut everywhere in the budget, including the large slice that funds the Department of Defense. The Congressional Budget Office's biennial Options for Reducing the Deficit lists reductions to the Pentagon's budget that would save $995 billion over ten years.

The best way to cut $2 trillion out of the budget is to ax everything the federal government does that it shouldn't be doing in the first place. It's time we rediscovered the exercise of thinking critically about government and the role it should or shouldn't play in our lives. Questions like, "Is that the role of government?" or "Should the federal government pay for that?" haven't been seriously considered in years. The muscle of fighting for first principles has atrophied among Republicans as it's no longer in style to call for small government.

Once you ask these questions, it's obvious that most of what the government does, it shouldn't. For instance, there's a lot of spending that goes to activities that are supposed to be the states' responsibility under our federalist model of government. Thus, federal grants-in-aid to the states are the first programs I would cut. These grants assault federalism,........

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