Center for a Stateless Society
A Left Market Anarchist Think Tank & Media Center
Government Spending: Two Steps Sideways, One Half-Step Back

After the meaningless theater of the March 2013 “sequester” and October’s anti-climactic two-week “shutdown,” you knew the third act was coming. US congressional leaders of both parties have announced a two-year budget deal which “would avoid tax increases, shrink the sequester by $63 billion over the next two years and modestly lower the long-term deficit” (“Budget Deal Would Up Spending, Avert Another Government Shutdown,” The Hill, December 10).

The problem with explaining this political theater is that the large numbers are hard to easily get one’s head around. But let’s take just one number and see what this “deal” means. According to The Hill, “[t]he long-term deficit would be cut by $23 billion.” Given that US government budget deficits have only recently descended back below the trillion-dollar level, $23 billion in deficit reduction over 10 years (that’s the “long-term” part), we can expect America’s politicians to finally bring their budgets into balance in, give or take, 400 years.

Except that we can’t, for four reasons.

The first reason is that these “budget deals” always get re-negotiated periodically (remember, this is a “two-year deal” — the projected 10-year results depend upon several subsequent Congresses falling into line, which will never, ever happen).

The second reason is that even after the politicians settle on a budget, they periodically — several times a year — come back to the well for “emergency supplemental appropriations.” Sometimes they feint toward reducing budgeted expenses to make up for these allegedly unforeseen new expenditures, but that never actually balances out.

The third reason is that with an openly declared “national debt” in excess of $17 trillion and as-yet unfunded future spending promises of (depending on who you ask) $70-100 trillion, the eventual financial collapse of the US government, presumably preceded by inability to borrow more, repudiation of its existing debt, and likely intentional hyper-inflation of its already severely debased currency, is virtually assured. Not in 400 years. Probably not even in 40 years. We’ll probably have to wait longer than four years, but I wouldn’t bet on that.

And the fourth reason — contributing substantially to the third reason — is that the US government’s traditional methods of raking off double-digit percentages of its victims’ earnings are already well on their way to completely ineffectuality. I’ve written elsewhere about Bitcoin. I don’t know that that particular encrypted, peer-to-peer, potentially anonymous digital currency will be the ultimate IRS-killer app. But I do know that such an app is coming. When it arrives government revenues are going to take a steep and probably irreversible dive.

I don’t begrudge America’s politicians their flair for the dramatic. I’m a fan of theater. But frankly we’ve now descended into soap opera and professional wrestling territory. Suspension of disbelief is getting extremely difficult to maintain, and the reality that keeps bleeding through is, from the politicians’ point of view, pretty ugly and scary. The curtain is coming down on the nation-state as we know it. Here’s to lots of applause and no encores.