Mises: Causes of Uncontrollable US Public Spending and Debt

A new piece published by the Mises Institute argues that America’s spiraling national debt is not simply the result of bad budgeting, but the product of decades of monetary and political decisions that fundamentally changed the relationship between citizens and government.

Writing for Mises Wire, Patrick Barron traces the roots of chronic federal deficits to the abandonment of the gold standard, the expansion of welfare programs, and the rise of what he calls “welfare-warfare spending.” According to Barron, these shifts removed the natural constraints that once limited government spending and debt accumulation.

“The main, and most obvious, reason that American spending has been in chronic deficit is that it abandoned the gold standard and appears to have no intention of reinstating it.”

Barron argues that nations historically relied on gold-backed currencies to impose discipline on governments, especially during and after wartime spending surges. He contends that once the United States fully severed ties with gold in the early 1970s, federal spending and monetary expansion accelerated dramatically.

The article also criticizes the long-term growth of entitlement programs and the expansion of government’s role in providing economic security. Barron points to programs like Social Security and Lyndon Johnson’s Great Society initiatives as major turning points that shifted responsibility away from individuals and toward the federal government.

“The main effect, in my humble opinion, is that it cemented in people’s minds that government is responsible for what had always been one’s individual responsibility.”

The piece highlights the dramatic growth in the monetary base, annual deficits, and total national debt since President Nixon suspended gold redemption in 1971. Barron cites Federal Reserve Economic Data (FRED) statistics showing the monetary base increasing from $85 billion in 1971 to more than $5.3 trillion in 2026, alongside a national debt that has climbed to $38.5 trillion.

Barron concludes that unchecked welfare and military spending — financed through monetary expansion — have created a system that is politically difficult to reverse and economically unsustainable over the long term.