“The path we’re on is unsustainable, and we'll have to get off that path sooner rather than later,” Federal Reserve Chairman Jerome Powell said.
Nearly everyone realizes that the current state of U.S. government debt is completely unsustainable.
Uncontrollable government spending and government debt create serious problems. Too much debt can limit the government’s ability to respond to economic downturns, and it allows for less margin of error when applying measures to combat wonky fiscal problems.
It also diverts funds from more important issues, such as infrastructure and defense spending.
Inflation is also an issue. So is eroding investor confidence and credit rating downgrades. On Aug. 1, Fitch Ratings, one of the major credit rating firms, downgraded the U.S. credit rating to AA+ from AAA.
A country as important as the United States should be focused on balancing the budget and spending less than it makes. But unfortunately, we’re very far from that reality.
At this juncture, the government spends more than it receives in tax revenue. Despite the calls for increasing taxes, the answer isn’t raising taxes. Raising taxes won’t work because the Democrat-led government will simply spend more money.
Interest costs have soared to $659 billion in 2023, up by $184 billion, which is a 39 percent increase from the previous year and almost double the amount from 2020.
There are many methods to reduce the U.S. national debt. One is austerity and cutting discretionary spending. Another is raising the Social Security retirement age.
One topic you often hear about is opening the borders to allow immigrants to come into America, work for lower-paying jobs, and potentially kick-start a wave of entrepreneurship. The issue here is that we have already let in millions and millions of illegal immigrants during the Biden administration, so this is a moot point. While I hope these new illegal immigrants can start an entrepreneurial revolution, it seems unlikely. If we only let in the world’s poorest, there’s a chance that they'll be too nearsighted and focused only on surviving rather than on building successful American companies.
Then there’s the issue of restructuring our debt. However, many point to the 14th Amendment’s statement that the “validity of the public debt of the United States ... shall not be questioned.” This is widely debated.
According to Eric Williamson of the University Virginia School of Law, “the U.S. has restructured its debt twice, under Alexander Hamilton’s debt repayment scheme in the 1790s, and later, at the start of the New Deal, when the U.S. abandoned the gold standard.”
Still, the fact remains that the United States shouldn’t issue so much debt that they have to restructure and reorganize debt. It’s not a good look.
The left loves spending money. Democrats throw money at problems while simultaneously ignoring whether the actual measures work. In recent years, Democrats have spent $2 trillion to “save the economy.”
House Budget Committee Leader Jason Smith (R-Mo.) stated: “The Democrats in the last two years now have increased spending more than 16 percent just to keep the lights on, not counting the more than $10 trillion—with a ‘t’—of increase of new spending that they’ve spent outside of just the regular funding process. That is why everyone is going to be having a blue Christmas. That’s why it’s costing every American more to just buy the Christmas tree, put the presents underneath the Christmas tree, put food on that table, and drive to their Christmas events. It’s causing a lot of struggles for working-class Americans.”
Under the Democrats, spending has increased by more than $10 trillion. According to the House Budget Committee, some of these increases include $2.5 trillion in interest payments on the growing federal debt, $1.9 trillion on the American Rescue Plan Act, $745 billion on the Inflation Reduction Act, $1 trillion-plus on President Joe Biden’s executive actions, and $625 billion on the Infrastructure Investment & Jobs Act.
Since the beginning of the Biden administration, inflation has been at a 40-year high of 7 percent, inflation has increased by 14 percent, and wages have decreased by 3.8 percent.
Federal debt interest payments were more than $103 billion in October and November—which is an 87 percent increase from last year.
Democrats are unable to help. We need change, and we need it fast. Let’s hope for a new wave of conservative victories over the next year. Otherwise, spending will continue to spiral out of control.
