America is spending its way to economic ruin.

I read a good article that talks about the deficit spending the government is doing and gives some numbers that illustrates the situation and states that it is unsustainable. (Some deficit spending is necessary; for example, deficit spending led to America becoming a prosperous nation during its early history. But if carried to far it can destroy a nation's economy. An example, you need to borrow money to buy a car so you can travel to work.)

(If you want to understand what deficit spending is, read the article 'Egalitarianism and Inflation by Ayn Rand. The article describes what deficit spending is in the most basic terms and where it leads to, last half is good. "You have all heard of some manipulator who does not work, but lives in luxury by obtaining a loan, which he the repays by obtaining another loan elsewhere, which he repays by obtaining another loan, etc. You know that his policy can’t go on forever, that it catches up with him eventually and he [C]rashes. But what if that manipulator is the government." If you have forty minutes, you can listen to it at AynRand.org)

The article points out that the optimum size of government is 25% of total economic output of a nation for a year, GDP. Beyond that level government spending will destroy the economy.( It was 100% at the end of WW 2 and in 1995 50%. All though the current conditions are something new.) In 2008 the government spending equaled 36%. In 2009 it will equal 43%. And, " Debt held by the public would rise, from 41 percent of GDP in 2008 to 57 percent in 2009 and then to 82 percent of GDP by 2019 (compared with 56 percent of GDP in that year under baseline assumptions). Hayek warned, "... democracy will have to learn that it must pay for its own follies and that it cannot draw unlimited checks on the future to solve its present problems."

The article states an interesting conclusion: "At some point, the government will NOT be able to fulfill its obligations and the public will vote more power to the state to fulfill these obligations and implement the ideas it has promised. This cycle inevitably leads to tyranny as Hayek warned over 60 years ago. It is NOT the road to long-term growth and prosperity that is paved with government spending and debt but rather the road to serfdom!"

What the nation produces is being wasted through government spending especially since it is financing its spending through debt-- the government will have to borrow 50 cents for every dollar it spends. More and more wealth will have to go towards paying down the debt and paying the interest on the debt. This means less capital for the private sector to produce wealth and expand the economy. Each household now owes 516,348 dollars to the national debt compared to around 110,000 for non government expenses. The current policies being implemented by the government is leading to a less productive economy.

The current policies being implemented by the government-- higher taxes, increase government spending, and government involvement in businesses-- have been shown by history and reality to lead to a slow and sluggish economy and, if carried too far and left unchecked, economic collapse. The government has been consuming and using up the nations capital though deficit spending for a long time now and has accelerated this process rapidly in the past nine months.(This is happening on a global scale.) Without capital, unused material goods, production and economic activity is impossible. The government is bankrupting the nation and your kids and grand kids will have to pay all of this debt back by becoming, in effect, slaves to the state because most of what they earn will be going to the government.

This all means that the economy will be sluggish and there will be little or no growth and there will be inflation coming down the road, maybe double digits, until the government stop its over spending, cuts taxes and end its excessive involvement in the economy to stimulates economic growth. This is the only way to pay down all of this debt. This level of debt is staggering to comprehend, the size and scope of it acts as a screen to hide it from the American people, and the only way to nullify the effect of it is if the government gets out of the way of America's productivity. This is possibly leading to an economic collapse which is the catalysis that Hayek was talking about that leads to a dictator (Look at the economic conditions in Germany that lead to Hitler. The socialist set up shop. They ruin the economy through their policies. The country goes into social upheaval. A dictator comes along and promises to fix everything. Then the people choose and give great powers to one man.) America is a great and productive nation and America can recover and avoid a long period of economic malaise or, in the worst scenario, an economic disaster, history shows that the current conditions, if left unchanged, leads to the latter. Americans need to get educated about what is happening and demand that the nation change course.