One day in the not-so-distant future, American government will begin shrinking in both size and spending. And as it shrinks, the public will demand it become smaller still, and politicians will acquiesce to that demand.

This is not the pipe dream of some wild-eyed anarchist; it is the product of human nature combined with mathematical certainty. At least, so say public policy researcher Stephen Slivinski and I in a recent academic paper for Arizona State University's Center for the Study of Economic Liberty.[1]

Our claim may seem ludicrous given the last two decades. After all, this century’s first president, Republican George W. Bush, created a giant new federal agency and launched one costly war of questionable value and mismanaged a second costly war. His Democratic successor, Barack Obama, ramped up federal spending, launched military adventures of his own, and became the first president to register a trillion-dollar budget deficit—which he then repeated three times. The current Republican president, Donald Trump, plans to ring up several trillion-dollar deficits in the coming years.[2] All three showed little concern over government’s ever-larger size, reach and cost.

In fact, Bush, Obama and Trump’s willingness to ring up giant deficits and pass tax cuts (yes, even Obama cut some taxes at various points in his presidency[3]) helped to make government both larger and more expensive. Because the cuts reduced people’s current tax bills, few cared that those presidents were borrowing money and expanding government’s size and spending. This is known as “fiscal illusion” because it tricks people into thinking government expansion comes at no cost. It follows one of the fundamental principles of economics, the Law of Demand: if the price of some good decreases, people will demand more of it.

How much debt are we talking about? Currently, the federal government’s debt, alone, is over $21 trillion,[4] which is roughly 105 percent of gross domestic product.[5] That means that if every penny of spending on U.S. products—including the $6.5 trillion that American government at all levels spends[6]—were redirected to paying the federal debt, it would take more than a year for it to be repaid.

But that doesn’t cover all of America’s financial obligations. On the federal level, the Social Security and Medicare programs now spend more money than their special taxes take in. If those programs keep their current level of benefits, then even with all the future tax money those programs will receive, a giant budget gap will emerge as the baby boom and subsequent generations retire, live longer, and draw benefits longer than previous generations did. The estimated total shortfall for Social Security over the next 75 years (basically, the lifespan of today’s children) is $13.2 trillion;[7] the shortfall for Medicare is $37.2 trillion[8]—and that’s assuming the federal government first repays all of the money it has borrowed from those programs over the years.

The financial outlook isn’t much better at the state level, even though most states have some sort of balanced-budget requirement. As the population ages, state Medicaid spending will balloon if it keeps providing its current level of benefits.[9] Likewise, trillions of dollars in retirement benefits that have been promised to public employees will require large state outlays because states have underfunded their retirement trust funds and poorly managed trust fund investments.[10] Those obligations will require new state-level taxes or reallocation of money now spent on other programs such as education, transportation and public safety.

What happens when all those government obligations come due? Then, taxes will have to rise to make the payments. At that point, the result of the Law of Demand will flip: the price of government will rise, so people will demand less of it. But even if future lawmakers cut spending, taxpayers will still be stuck with high taxes in order to pay off the old spending and other obligations. So taxpayers will demand even more budget-cutting in the hope of getting a break on their taxes. The result is that government will shrink, and taxpayers will demand it shrink further still.

All this debt is a mathematical certainty. The Law of Demand is well-demonstrated human nature. Thus the era of smaller government is coming—though it will be a painful era as people pay high taxes but receive few government services. At least, so predict Steve and I.