Does more federal spending help the economy?

Nov 13, 2025 by AFP

Federal spending is at an all-time high.

According to the Congressional Budget Office, the federal government is expected to spend $6.8 trillion this fiscal year alone; that’s almost $19,000 for every person  living in America.

But the overspending isn’t new. Over the last 20 years, Washington has run deficits.

Why? Because too many politicians in Washington are addicted to reckless spending.

What’s worse is that some believe that spending more money will improve the economy.

Of course, they’re wrong.

Runaway spending does the total opposite: It hurts the economy.

How much is Washington spending

Before we show how overspending hurts the economy, we need to be very clear on the scope and size of our federal spending problem.

Here are the numbers:  

  • Just in Fiscal Year 2025, the government spent $7 trillion.
  • That’s more than triple what it spent in 2001, when the budget was under $2 trillion.
  • Unsurprisingly, the American government spends way more than it collects, as they’ve run a deficit every single year since 2001.
  • All those deficits have added up to a massive debt: Over $38 trillion and counting.

Those are the cold facts.

What more spending does: More debt and more inflation

Now, here’s why this is bad.

Whenever Washington spends more money, it has to get it from one of three sources: higher taxes, borrowing, or printing money.

  • Raising taxes doesn’t help grow the economy, as it just redistributes wealth from one group to another; it does nothing to help us create more prosperity for all.
  • When the government borrows, there’s less money for private companies to create new jobs and invest in the future.
  • Printing money only creates inflation, as there’s more money in the market than there should be, which destroys savings and makes everyone poorer. In fact, the record-high inflation of 2022 was mainly caused by reckless federal spending, according to this study from MIT.

Some debt alone won’t harm a strong economy like America’s, but Washington’s actions have gone much further.

The national debt now exceeds America’s annual GDP, and interest payments outpace military funding.

Each time Congress spends beyond its means, the risk of major tax increases or higher inflation grows.

How to get federal spending under control: Make a government that works

So if runaway government spending only brings more trouble to our future economy, why is Washington doing nothing about it?

Well, here’s the problem: The system is broken.

Congress can’t pass budgets on time, an army of unelected bureaucrats writes most of America’s rules and regulations, there’s rampant fraud and abuse, and the vast majority of our government spending isn’t even debated or reviewed by Congress.

That’s why Americans for Prosperity launched the Make Government Work campaign. If we want to get government spending under control, we need to get rid of the dysfunction in Washington.

Bills like the Reins Act, the Prevent Government Shutdown Act, the Comprehensive Congressional Budget Act, and the Midnight Rules Relief Act will restore common sense in Washington and bring us back to the path of fiscal sanity.

If you want to stop government waste, join us and help push for a government that respects your hard-earned dollars.

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