"Happy" Cost of Government Day, Taxpayers!

Thursday, August 11, 2011 8:00 AM by Jacob Feldman

The Cost of Government Day report, published annually by Americans for Tax Reform Foundation, measures the number of calendar days Americans must work to pay off the costs of federal, state, and local spending and regulations. In 2011, Americans worked until August 12, 224 days of the year, before earning for themselves. This is forty-one more days than only ten years ago.

The driving cost of government is federal spending. Responsible for 103 days of your labor, the Obama federal spending agenda increased Cost of Government Day by 13 days in only 13 years to 28.2 percent of net national product. Worse yet, certain federal grants were given to state and local governments conditional upon an increase in spending.

These outlays are expected to pressure state and local governments to increase taxes by $80 billion. With the introduction of the Main Street Fairness Act, states threaten to increase taxes by $23 billion on citizens who neither live in-state nor are beneficiaries of the state’s spending.

The regulatory burden is the second largest burden of government after federal spending. In only ten years, the regulatory burden increased by 18 days. In 2011, regulations added $2.85 trillion in costs to the price of everyday goods while eliminating jobs and economic growth.

With the advent of Dodd-Frank, over 500 financial regulations are waiting in the wings to inhibit financial markets and decrease funds available for businesses to borrow. These regulations will impose at least $20 billion of compliance costs and decrease the size of economic pie. Throw in proposed EPA regulations that will increase electricity prices on 68 percent of national production and another 18 days are forecasted to be added to future Cost of Government Days.

Two different futures are laid out in the Cost of Government Day report. In the first, the Cost of Government steadily increases to August 25 by 2021 after adjusting for the debt-ceiling deal. Federal spending continues according to CBO estimates while the regulatory machine continues to grow. In the second future, government adopts the House Budget plan, with the path leading to spending cuts and a return of the US’s AAA credit rating. These cuts reduce the size of government involvement in mail delivery, cease to overpay federal workers, and stop Fannie Mae and Freddie Mac taxpayer subsidization. The path of less government returns Cost of Government Day to July 23—one day later than in 1982.

Tomorrow, halfway through August and almost entirely through the fiscal year, taxpayers will start to earn money for themselves. Happy 2011 Cost of Government Day, America!

Tags: FederalSpending Bailouts Federal