Washington's Bipartisan Fiscal Folly

spiral

For years, I have been sounding the alarm about chronic federal deficit spending—practiced by both Republicans and Democrats—steering our country into a fiscal abyss. I feel like a broken record as I periodically chronicle the folly of it all. The process has taken on a sense of inevitability as we watch what feels to me like a slow-motion train wreck.

I have remarked on various milestones along this dangerous course:

Americans as a people and a polity are astoundingly indifferent to debt and have embraced it as the (temporarily) normal way to live.

One significant marker along the way was the grim prospect of more of our tax dollars going to service of the national debt than to national defense. (I also pointed out that this has only been possible because a compliant central bank, the Federal Reserve System, has suppressed interest rates—the cost of borrowing money—for over a decade and, indeed, has painted itself into a corner that makes ultralow interest rates the only policy option until a financial cataclysm occurs.)

I noted that populist president Donald Trump—despite adopting a number of economically intelligent policies—was completely unwilling to rein in federal spending. Unlike some Republican leaders in previous years, Trump perceived that Democrats’ big-spending agenda was unstoppable. He indicated this major concession by readily agreeing to suspend Uncle Sam’s statutory debt ceiling in the summer of 2019 and then adopted a $1.4 trillion increase in the government’s discretionary spending in December 2019.

Since then, the deficit spending problem has accelerated at a dizzying pace. The pretext or trigger or (ir)rationale (whatever you prefer to call it) was the covid-19 pandemic. In my article about the December 2019 spending blowout, I underscored the simple mathematic fact of life that federal deficits were growing because even though the government’s revenue was increasing by 4 percent, spending was rising by 8 percent. Fast-forward to the present: according to the Bipartisan Policy Center’s Deficit Tracker, as of this April, “[w]hile revenues have grown 6% year-over-year, cumulative spending has surged 45% above last year’s pace.”

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