The Five Reasons Musk Is Making The Exact Wrong Move If He Wants Lower Spending
This mistake has been made before . . .
Elon Musk, in his apparent frustration over wanton spending by Congress, has started a third party. His stated goal is to elect more fiscally responsible candidates. While it is a laudable goal, it is the exact wrong strategy and, if he keeps at it, more spending will occur, not less.
At the outset, I want to state I share Musk’s goal of the need for reduced spending. Since President Reagan stated that government is not the solution to our problems, federal spending has grown by 350%, adjusting for the very damaging inflation over the last 40 years.
Indeed, the cumulative rate of inflation, since 1980, has been approximately 290%. Of course, exploding federal spending is at the core of that inflation - which inflation has eroded wages and purchasing power.
A great deal of that increase in spending, as you can see from the chart below, occurred during the government response to COVID. As the states shut down their economies, resulting it a huge national contraction in 2020, federal spending surged.
The problem is that spending has not come back down substantially after the crisis passed – unlike after the Great Depression and World War II. We now live in a Country with federal debt headed to $40 trillion, with interest on the debt the third largest item in the budget, trailing only Social Security and Medicare.
As for Social Security, by 2035, its revenues will be $350 billion less than scheduled Social Security benefits. Meanwhile, in 2024, the Medicare Trustees projected the depletion of the Medicare Hospital Insurance Trust Fund in 2036.
In short, America has less than a decade to get its fiscal house in order. The 2030s are shaping up to be America’s fiscal cliff.
If Musk wants to win the battle over out-of-control spending, he needs to realize these five things:
1. Americans Are “Sold” Spending Every Day.
The spending chart above demonstrates that the rise in federal spending tracks with the rise of television and other media since the late 1960s. With a television in every home, and now a news outlet in every hand, the case for more government is made every day in the form of stories of inequity and tragedies and politicians promising a government response.
Meanwhile, as I have written previously, the Democrat party is play the long game by ramping up endless government spending. The DC Democrats firmly believe their power is based on their ability to hand out money. That is why they fight any reductions tooth and nail.
All of that matters because the battle to reduce spending won’t be won until Americans are sold on the fact that endless spending is damaging their well-being now and more every day.
As Margaet Thatcher famously said, “First you win the argument, then you win the vote.”
The effects of television and the DC Democrats convincing Americans that they can vote themselves rich must be overcome. There will be no victory over spending until that happens.
2. Large Policy Changes Follow Large Victories, Not Split Victories.
The history of elected government finds that large policy changes follow large electoral victories. They occurs far less in divided governments.
Perhaps the largest government policy changes in American history, excluding the Civil War, followed the successive elections of Franklin Delano Roosevelt. FDR won a resounding 472 to 59 Electoral College victor over Hoover. Democrats gained 97 seats during that 1932 election, then 9 more seats in 1934, and 12 more seats in 1936.
That next Congress, the Democrats held 334 seats to just 88 for the Republicans. Of course, during that stretch, FDR pushed through the largest expansion in government power in American history.
President Johnson’s Great Society programs were passed when Democrats had margins of 258 – 176 and 295 to 140. After Obama’s 2008 victory, ObamaCare (another large expansion in government power) passed because Democrats held a 257 to 178 margin in the House.
It is important to note that 39 House Democrats voted against Obamacare. It is law today because of the Democrats large House margin at the time it was passed.
On the other hand, as Musk just witnessed, the Great Big Beautiful Bill passed by a few votes with Republicans holding a five-seat House margin. In the Senate, the bill passed only because the Republicans bought the vote of Senator Murkowski for hundreds of billions in spending after the “fiscally responsible” Senator Rand Paul wouldn’t vote for the bill.
The moral of that story is large majorities, with their inherent margin for error, are more bold than small majorities.
3. A Split On One Political Side Results in Victories for the Other Side.
Parties at war with themselves tend to lose elections. For instance, despite maintaining their sizeable lead in Congress, the Democrats lost the 1968 Presidential election because of their division over the Vietnam war.
In 1992 and 1996, Bill Clinton won the presidency twice despite never obtaining 50% of the vote. Why? Because the presidential vote on the right was split by Ross Perot. Not ironically, that split occurred over Perot’s fiscal concerns. Musk should take note.
4. Musk’s Party Will Elect More Democrats.
Musk’s Party is concerned with fiscal issues. In America today, the vast majority of voters with concerns over fiscal issues are on the right.
If Musk field candidates that challenge Congressional Republicans on the right, that will have the same result as when Perot split the vote and made it possible for Clinton to win without reaching 50%. In other words, in those Congressional seats in play, a three-way race will result in Democrat victories that will place control of Congress in Democrat hands.
5. Democrats in Charge of Congress Will result In More Spending.
After Bill Clinton was elected, he proposed HillaryCare. That program would have exploded government spending. It was stopped by fiscal Democrats and Republicans.
There are no such Democrats left in Congress. In plain terms, if we place today’s Democrats (100% of which just voted against trimming the increase in Medicaid spending) in control of the House of Representatives, the result be much higher spending.
The only possible decrease in spending will come with a large Republican majority.
In sum, despite his laudable motive, Musk is dooming America to even higher spending. With America’s fiscal cliff less than a decade away, it could not be a worse result
Thomas G. Del Beccaro is the Author of The Lessons of The American Civilizationand The Divided Era. Join him at TomDel.com