The Big State Monetary And Fiscal System Is Over
ZeroHedge, Sep 22, 2026 – Authored by Daniel Lacalle via dlacalle.com,
Excerpts:
In 2021, The Economist ran an entire number hailing “The Return of Big Government” as the end of the so-called – but inexistent in practice – “austerity” paradigm and the evidence that more spending and a big state was the solution to the post-covid world, delivering economic growth, social spending, and sustainability.
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Advocates of ever-larger government frequently argue that fiscal stimulus creates growth. The evidence from developed economies is the opposite.
After years of extraordinary deficits, public spending programs, central-bank asset purchases, and industrial-policy initiatives, most advanced economies face low trend growth, weak private investment, declining productivity, unaffordable housing, high tax burdens, and increasingly poor public finances.
The problem is not just that governments spend too much. It is that governments spend resources in the worst possible way, worse than private actors, and direct capital according to political priorities rather than consumer demand, profitability, or long-term productive value. Governments are exceptionally bad at picking winners and even worse at picking losers.
The problem is also in the economics world. GDP accounting treats public spending as an addition to output. But real prosperity depends on whether resources are used productively. A government can borrow and spend billions while leaving the economy poorer in productive terms as that spending crowds out private investment, raises taxes, sustains unproductive activities, or fuels inflation.
The solution is not to borrow more in hopes the next stimulus will succeed where the last failed. The solution is to remove the obstacles that prevent private-sector growth.
Developed economies need a policy reversal based on four principles.
First, they need sound money. Central banks should shut down. However, since this will not happen, they must return to their mandate: protecting the currency’s purchasing power. Monetary policy should not be used to fund deficits, manipulate sovereign-bond markets, or protect governments from the consequences of fiscal irresponsibility.
Second, governments must balance their budgets through durable spending reductions, not cosmetic measures, tax hikes, or optimistic growth assumptions. Spending cuts should focus on eliminating inefficient subsidies, duplicative administration, corporate welfare, politically directed investment schemes, and entitlement commitments that cannot be financed.
Third, policymakers must cut taxes, particularly those that penalize work, investment, savings, entrepreneurship, and capital formation. A tax-increase strategy is politically convenient because it avoids confronting the expenditure problem. However, it reduces incentives to produce, invest, hire, and innovate precisely when economies need more dynamism.
Fourth, advanced economies need an ambitious deregulation agenda. Lower barriers to business formation, energy production, housing construction, labor-market flexibility, and investment would do more for sustainable growth than another decade of deficit spending.
The big-state monetary and fiscal system is over because it is no longer credible financially, economically, or politically. The bond market is making clear that there is no permanent escape from fiscal arithmetic.
The reader may say that governments will choose more intervention, more debt, more monetary distortion, and more stagnation. However, for the first time, we are seeing citizens all over the world rejecting these promises. Governments and large political parties may have to change their policies because the failure is evident and the voter base simply says enough is enough. That is why the cultural battle is so important. The goal is to make voters understand that the solution is not more government, but less. A lot less.
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“That is why the cultural battle is so important. The goal is to make voters understand that the solution is not more government, but less. A lot less.“
The Leviticus 25 Plan delivers on all counts:
$37.303 billion federal budget surpluses each of the first five years of activation (2027-2031); state and local budget rebalancing; massive debt elimination and interest expense charges for tens of millions of U.S. citizens; real (non-debt based) economic growth; citizen-centered health care; and a LOT LESS government control over responsible, hard-working Americans.
U.S. Dollar’s purchasing power – protected;
Durable spending reductions, entitlement spending rollbacks – activated; .
Tax cuts and deregulation policies – ‘in play.’
The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens. It is a comprehensive plan with long-term economic and social benefits for citizens and government.
The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.
The Leviticus 25 Plan – An Economic Acceleration Plan for America
$95,000 per U.S. citizen – Leviticus 25 Plan 2027 (70824 downloads )