News flash – the COVID pandemic is over. President Joe Biden even said so, on “60 Minutes.” So why are we still spending money at such a furious pace?
The federal government is too big. It taxes too much, spends too much, and borrows too much — all because it does too much, including doing many, many things it just has no business doing. As former Texas Sen. Phil Gramm used to say, we wouldn’t want the government we have now even if it were free.
Federal spending and the national debt are at never-before-seen levels. Both are too high — way too high.
Yet somehow, as debt ceiling discussions begin, Democrats seem to think spending and debt levels are not linked. That’s absurd.
Anybody who’s ever had to try to get out of a debt hole knows that’s preposterous – of course debt and spending are linked. Who ever tried to get out of debt without first figuring out a way to cut his or her spending?
During the last year of President Donald Trump’s administration, fueled by fears of COVID, the federal government increased its spending from $5.14 trillion in fiscal year 2019 to $7.47 trillion in fiscal year 2020, and then kept it at $7.38 trillion in fiscal year 2021.
Put another way, federal spending exploded from 21 percent of gross domestic product in 2019 to 31 percent in 2020, and then remained extraordinarily high at 30 percent in 2021.
Not surprisingly, deficits grew at the same pace. In fiscal 2019, the deficit came in at $984 billion. In year fiscal 2020, it surged to $3.13 trillion, followed by $2.77 trillion in fiscal year 2021.
You might have thought that after such wild spending, rationality would have returned by fiscal 2022. You would have been wrong. Fiscal 2022 spending fell only slightly to $6.27 trillion, representing 25 percent of gross domestic product. The deficit fell, too, to $1.38 trillion – but even then, the deficit was 40 percent more than the deficit had been in the last year before Covid spending kicked in.
And fiscal 2023? President Biden proposed a budget calling for $5.8 trillion in spending, with a $1.2 trillion deficit. Over the first three months of fiscal 2023, however, the deficit was $418 billion, which is on track for an annual deficit closer to $1.7 trillion, almost 50 percent larger than the deficit projected by Biden’s team less than a year ago.
With reckless spending like that, it’s no wonder our national debt has grown beyond $31 trillion. That represents 129% of the gross domestic product, a dangerously high level that the St. Louis Federal Reserve Bank helpfully reminds us even surpasses the debt-to-GDP ratio we hit immediately following World War II.
To make matters worse, that reckless spending has led to massive inflation — as we’ve heard repeatedly for the last year, it’s the worst inflation of the last 40 years. That inflation is a not-so-hidden tax, robbing our purchasing power as if the government itself were reaching into our wallets and stealing money.
That inflation doesn’t just reduce our purchasing power. Because it’s so bad, the Federal Reserve must use the tools at its disposal (read: raising interest rates) to get that inflation under control.
Given the size of our government’s annual deficit, those increases in interest rates translate into massive increases in our annual debt service costs: Those debt service costs in fiscal year 2022 rose from $352 billion the previous year to $475 billion, and they’ll be higher next year.
As the decade progresses, those rising interest rates will lead to still greater increases in debt service costs. Within a few years, according to Moody’s Analytics, our debt service costs will rival (and may surpass) our defense budget.
There’s a difference, of course, between debt service and everything else in the budget: Debt service doesn’t buy anything tangible. Those hundreds of billions of dollars in debt service costs don’t buy a single tank, they don’t pay a single Border Patrol agent’s salary, and they don’t purchase a single mile of border wall. They just go to pay back lenders who finance our reckless spending.
We spend way too much money. The GOP House majority must use all the leverage points it has to get that spending under control. The debt ceiling is the first of these leverage points.
We cannot sustain our reckless spending. We need to cut spending so we can balance our budget, and we need to begin that process now.
Jenny Beth Martin is Honorary Chairman of Tea Party Patriots Action.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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