In some of my several posts about a national divorce (see this, this, this, this, this, and this), I have opined that the new union formed by conservative States
could easily afford a robust defense after having shed the many useless departments and agencies — and their policies — that burden taxpayers and the economy.
(Many of the policies, especially those that regulate economic activity, are worse than useless: they are economically destructive; see this and this).
Let’s examine the proposition that the new union could easily afford a robust defense. For this exercise, I assume that the new union, which I have elsewhere dubbed Freedomland, consists of 25 States (listed in order of population): Texas, Florida, Ohio, North Carolina, Tennessee, Indiana, Missouri, South Carolina, Alabama, Louisiana, Kentucky, Oklahoma, Utah, Iowa, Arkansas, Kansas, Mississippi, Nebraska, Idaho, West Virginia, Montana, South Dakoto, North Dakota, Alaska, and Wyoming. (A shift of one or two States in either direction won’t change the thrust of this analysis.)
Those 25 States comprise 43 percent of the population of the United States. But they account for only 38 percent of U.S. GDP. (The discrepancy shouldn’t be surprising given the composition of the list.)
The cost of the federal government in 2022 (the latest year for which estimates are available at bea.gov) was just over $6 trillion, including $725 billion in interest payments on federal debt. The operating cost of the federal government was therefore about $5.3 trillion, including $727 billion for national defense. (It’s telling national defense, a key element of the impetus for the Constitution, accounts for only 12 percent of federal spending and is about the same as the cost of financing the federal debt.) Assuming that the cost of the federal government, less debt service, is shared in proportion to the distribution of GDP, the citizens of Freedomland are pumping more than $2 trillion a year into the federal treasury.
Now, what to do about the federal government? Team Blue, in a spirit of “fairness”, might propose keeping it intact and sharing costs and benefits according to Team Blue’s and Freedomland’s respective shares of GDP. Team Blue would (of course) continue to operate the federal government and would (of course) honestly account for the distribution of costs and benefits. It would be up to Team Blue (of course) to decide the level of costs and benefits.
Freedomland would reject the deal out of hand, not wanting its fiscal future to be hijacked by the cost of an ever-growing and ever-interfering central government. Freedomland’s leaders would make the following calculations:
- 38 percent of $6 trillion = $2.3 trillion.
- Freedomland’s share of federal outlays on health benefits and income security is $1.5 trillion a year. In exchange for giving up its share of those outlays, Freedomland will set up its own system of health benefits and income security. (The initial costs will be offset and reduced over time by robust economic growth; the reduction of benefits flowing to able-bodied persons below retirement age; rolling back the expansion of Medicare; denying benefits (direct or indirect) to illegal aliens; raising the retirement age; increasing work requirements; etc.)
- Freedomland will take responsibility for defense of the 50 States and the District of Columbia. (It would be far more costly to defend Team Blue and Freedomland separately. Team Blue could trust Freedomland to mount a robust defense of the continent. And Freedomland would be assured of border security by doing the job itself.)
Freedomland’s total (initial) cost to defend the nation and ensure the health and income security of its citizens: the same $2.3 trillion a year it now sends to DC. But in the long run, the citizens of Freedomland would be far better off economically and relieved of the oppressive government in DC.
But the citizens of Freedomland should never forget that eternal vigilance is the price of liberty — and prosperity.
Politics and Prosperity 