How long can this last? It’s a serious question deserving of a serious answer. Last week, the Congressional Budget Office said the federal government added $1.4 trillion to the national deficit, which grew to over $31 trillion and rising. In December alone, the government spent $82 billion. It comes as the Treasury Department recorded a record-high revenue of $4.9 trillion.
Here’s a number for you to consider… the government spent $4 billion per day, and over $10,000 per household for the year. Without changes to the amount of spending the government does, the debt and deficit could grow to an unsustainable level within a decade or less when compared with the Gross Domestic Product.
Next year, the deficit could eclipse 6.1% of GDP. It’s only done that six times since 1946.
House Republicans say they are intent on getting government spending under control and will use extending the debt ceiling to gain concessions. This is important for one primary reason. Government spending is closely tied to inflation.
The more money the government injects into the economy, the more people have to spend. That drives up demand without balancing supplies. Hence, the 40-year inflation highs.
Reducing spending could be a difficult task for Republicans.
President Biden has said he’s unwilling to negotiate and is leaving the White House on a demagoguery tour this week. His solution to the problem is to increase taxes on an already taxed-out America while empowering the government’s hunger for more spending.
Currently, Americans have already received a tax increase thanks to inflation.
So, Republicans have to ask where they intend to cut. Waste, fraud, and abuse are easy targets. Still, it’s not enough to make a measurable dent in the debt.
On Friday, I shared how Great Depression-style warnings are going off. In 2022, real disposable income dropped by over $1 trillion. It’s the largest loss since 1932.
The average family lost $6,000 in spending power.
The Federal Reserve’s interest rate hikes increased borrowing costs by an average of $1,400. In total, the average household lost $7,400 last year.
Some difficult decisions need to be made, but Democrats don’t appear interested in protecting America or its citizens for the long term.
According to Pew Research, social programs account for 65% of the federal budget. That includes 24% for Social Security, 15% for Medicare, 13% for health, and 13% for income security.
Compare that to 15% total for defense, which is where the Left wants to reduce spending.
Biden is out there saying Republicans want to cut Social Security and Medicare. That’s not accurate. Regardless, what the data points out is that the federal government has become a giant insurance company.
It uses a combination of taxpayer dollars and debt to fund its operation. The caveat is the government also happens to have a sideline business involving defense and homeland security.
So, ask yourself this… is the government really just a big pyramid scheme that uses taxpayer dollars to move money from one group to another?
What the politicians have done over the last 80 years is hook people on government dependency. I’ve written repeatedly about this, but the fact is getting people off it will come with significant political bravery and courage.
There will be a reaction from the Left, and they will hurl the old “Republicans hate you” speech.
The fact is, if the government doesn’t self-correct, it will likely hurt those significantly in the long-term it’s supposedly helping once the programs become unsustainable.
For now, who cares so long as people receive their benefits?
That’s the exact line of thinking that’s got the country in the messes it’s in.
The Conservative Era, Copyright 2023