By james art TThe Biden-Harris administration wants the public to believe that the country is in great economic shape. Yet the budget deficit tells a story of unsustainable spending.
In the past fiscal year that ended Sept. 30, the federal government gave out $1.83 trillion more than it took in. This red ink has increased the national debt to over $35 trillion.
Last year, the federal government generated almost $5 trillion in revenue. That’s an 11 percent increase over the previous year, or about $480 billion. Personal income tax collections jumped 11 percent. Corporate income tax collections jumped 26 percent.
There is a lesson here. Lower tax rates can increase tax collections if they increase economic activity. A growing economy can lead to a surge in tax revenue.
More federal tax revenue, however, can’t fix what’s driving the debt and deficit — ever-higher spending. Last year, spending jumped by almost $700 billion. Total federal spending was $6.75 trillion, according to the Wall Street Journal.
It’s practically impossible to fathom such large numbers, so here’s some context. In 1974, total federal spending was less than $270 billion. In 1994, it was $1.46 trillion. In 2004, it was $2.29 trillion. In 2014, it was $3.51 trillion. These statistics are from the American Presidency Project at the University of California, Santa Barbara.
Federal spending is about 25 times higher today than it was 50 years ago. That’s almost double what it was just a decade ago.
If you really want to be shocked, think back to 1934, when federal spending was $6.5 billion. The federal budget is about 1,000 times larger than it was 90 years ago. This is exponential growth.
Unfortunately, many Americans are not interested in cutting costs. A significant portion of spending goes to Social Security, Medicare, and other health care programs. Yet interest on the debt – the result of decades of ignoring the problem – now threatens to push back other initiatives.
Democrats have spent decades arguing that tax cuts lead to debt. Yet in a fiscal year when federal revenue rose 11 percent, polls in Washington swallowed the increase — and more. It’s never enough to satisfy the Beltway appetite for bigger government.
Unfortunately, the debt and deficit cannot be eliminated. At certain levels, they become a hindrance to the economy and future economic growth. Excessive government spending is also a major factor in inflation.
Federal spending is a common problem. Elected officials must align themselves with the American people, and voters must elect those who are willing to embrace fiscal soundness before it is too late.
The views expressed above are those of the Las Vegas Review-Journal.