American Independence = Financial Independence
When America declared its independence nearly 250 years ago, it was not only a political revolution but also an assertion of self-reliance. The Founders of our country believed that Americans ought to be able to self-govern without dependence on a distant power. Today, that spirit of independence is under strain—not from a foreign monarch, but from our own government’s addiction to debt and federal dependence.
The U.S. federal government is nearly $40 trillion in debt and climbing. Rising debt leads to higher interest rates, hyperinflation, and investment crowd out. It also leaves our country more vulnerable to crises, as the government has less financial flexibility. This is alarming not only for Americans partaking in the economy today, but also for future generations that will be unfairly burdened by decades of fiscal irresponsibility.
A major driver of federal spending, and threat to federalism, is the ever-expanding system of federal grants to state and local governments, which totaled $1.1 trillion in fiscal year 2024. Much of this funding creates state reliance on federal dollars to sustain their budgets. In Louisiana, nearly half of the state’s budget over the last five years has come from federal sources.
This money is not free—it comes with strings attached in the form of mandates, regulations, and compliance costs that limit how states can operate and prioritize spending. To make matters worse, federal grants aren’t guaranteed each year. If funding is reduced or cut entirely, states are left facing budget crises. Often, Louisiana taxpayers end up bearing the costs of once federally funded programs. In many cases, federal grants create a dangerous cycle of overspending and lost autonomy.
States should strive to be financially independent of Washington on the principle of federalism. The idea of state resilience against federal manipulation isn’t exaggeratory or pessimism, but an attitude that our Founders considered essential for our country’s survival. Wrote James Madison in Federalist No. 46: “Should an unwarrantable measure of the federal government be unpopular in particular States, the means of opposition to it are powerful and at hand.” While states have since become less empowered to resist federal overreach, Louisiana can move toward building a more self-sustaining fiscal foundation by:
- Reining in state spending to match what taxpayers can afford.
- Prioritizing efficiency over expansion, ensuring state programs deliver real value.
- Reducing dependency on federal funds by growing the private sector and expanding the tax base in the name of fairness and simplicity.
- Pushing for fiscal discipline in Washington, where every new program or bailout adds to the debt our states must eventually shoulder.
American independence relies on financial independence because liberty and responsibility are inseparable. Americans should be wary of ever-increasing federal spending that threatens economic stability at both the national and state levels. Louisiana and every state must budget sustainably to reclaim the freedom that comes from self-reliance. A government that operates beyond its means inevitably limits the freedom of those who must pay for it.