The Biggest Government in History

For those of you who are fans of big government, congratulations are in order. The United States of America has the largest government in the history of the world.

To give you an idea of just how big we have become, the federal government spent 6.13 trillion dollars in 2023. Putting that in perspective, it took since our nation’s founding in 1776 to the year 1981 to hit a trillion dollar deficit.  Now we spend and borrow way more than that every year. A mere 43 years later after hitting the one trillion mark, which is today by the way, we have 34 trillion in debt. And that’s not the all of it. There is something called unfunded liabilities (debt that isn’t quite due yet but will be) and that is so astronomically high no one really can put an accurate figure on it. Best guess is it’s about 80 trillion.

The 6.13 trillion we doled out in 2023 is nominally larger (in actual total dollars) than the GDP of almost every nation on the planet. GDP means every dime, dollar and nickel spent in a year.  The percentage of GDP that our government requires to take from its citizens to run it currently stands at 36%.  In other words, all the bureaus, agencies and departments of the government devour that much of what the entire nation makes by selling whatever it is you all sell and service whatever it is you all service. Simply put, all the money changing hands between every one of us ends up leaking about a third of it into the government’s hungry mouth.

Percentage wise, Vladimir Putin’s vaulted Russia is tied with us. China is close at about 33%. But as I said, in nominal dollars, which is basically how many trillions are consumed, we are the largest.

Ukraine’s government consumes a whopping 66% of its people’s money. No wonder they’re are broke.  But in actually dollars compared to us, is chicken feed.

An interesting side note: I normally wouldn’t think of Iran as a well-run place, but its government comparatively is on a diet at 12% of GDP.

And what state in Uncle Sam’s empire has the largest unfunded liabilities?

Look down at the ground if you live where I live, and I live in the Golden State of California.

So we have to ask, what do we get for all that debt?

Many would argue not nearly our money’s worth while others would claim we get one hell of a deal. For that matter, why not give them more of what we make?

Uh, no, please don’t.

How did we get in such a debt laden mess?

Like anyone else who gets stuffed to the gills in debt, we spend more than we make, that’s how.

Governments who can print money can basically spend as much as they please. And most all governments can print their own versions.

Here in the U.S., our lofty government conjures up U.S. dollars from the printing press, nicknamed the greenback.

Over in Switzerland they manufacture Swiss Francs and in Japan, the mighty Yen is the meal of the day.

And so on and so forth throughout the Earth-land.

And nary a restriction constrains any of them from doing so.

But it wasn’t always so.

Decades ago, and through much of time, the currencies of the civilized world were backed by gold.

If you printed up a million dollars, you had to have a million dollars in gold. In that way, you avoided the Mexican Peso moment. That’s my nickname for unbridled printing of colored paper with dead presidents on them, until you print so many of them, no one accepts them anymore.

There are more technical terms for it, the simplest one being inflation. But since many people know the word but really don’t understand what inflation is besides rising prices, the words Mexican Peso seems to instantly educate people on what is so bad about inflation and printing up money.

As modern day governments go, they can’t stop spending.

But that dang gold always seemed to get in the way.

And in man’s creative imagination, the mother of invention spawned a novel but simplistic remedy to unbridling the purse strings: Say the hell with backing the money with gold.

It makes no sense anyway. At least to the spenders. And in one swift edict, followed by many swift edicts, one by one, the nations of the world said the heck with this gold thing.

Gold wasn’t tossed out the window mind you, but the relationship between it and colored paper with dead presidents on them was eliminated.

And that is why the debt is so high all over the world.

Because we, they, us and them, can print as many dollars, Francs, Yen, Euros, Rupees and whatever else there is, simply because we want to.

“Watching the markets so you don’t have to”                                           

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(As mentioned please use the below disclaimer exactly) THANKS   (Regulations)    

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249. His insurance agency is BAP INC. insurance services.  Email: news@moneymanagementradio.com