When I was young, there was a lot of concern and debate about the federal deficit and the national debt. Legitimate budget hawks ran for office, and often won. Even Democrats, like William Proxmire, ran as guardians of the public treasury.
But at some point, as deficits continued to mount and the feared crisis failed to materialize, politicians unapologetically began to print money. Thus, the entire federal debt at the end of the 1960s was $354 billion. That is less than the deficit the federal government ran in the first quarter of 2024, i.e. between October and December 2023–$510 billion. Sure, the dollar was worth a lot more in the 1960s. But we are comparing a single quarter with the history of the U.S. through 1969.
At Healthy Skeptic, Kevin Roche expresses some righteous indignation:
New data from December on federal spending and revenue make the federal fiscal picture look even more disastrous than I previously believed it was. The epidemic is over, the economy is supposedly in fine shape, but somehow the federal deficit doubled from 2022 to 2023, to over $2 trillion. But the real problem is that although the economy is supposedly great, tax collections have dropped. In December the feds spent $559 billion and collected only $449 billion. Although the economy is reported to be growing, tax receipts were lower than in December 2022 and even further lower than those in December 2021. Not a good trend. In fact, during most of 2023, tax receipts have declined, making the GDP numbers seem suspiciously high.
We are actually in the first quarter of fiscal 2024, October through December 2023, and the deficit is at a record level other than the first CV-19 year, and is far above original estimates, $130 billion compared to an $88 billion projection. The Bidementia administration is clueless about either the depth of the problem or how to address it.
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This level of deficit pressures the Treasury to have to sell massive amounts of debt, at higher interest rates. The Federal Reserve can do nothing about this; it has lost control of interest rates–supply and demand factors will control those now and it isn’t pretty. The higher interest rates add even more to the deficit.
Obviously, we need to cut federal spending drastically. But what politician is running on that platform? Certainly not Donald Trump. Almost unnoticed in the current news cycle/clown show is the negotiation going on in Washington over the Biden administration’s budget. House Speaker Mike Johnson is trying to drive the numbers down, and Steve Moore thinks he should be commended:
New House Speaker Mike Johnson has negotiated the shrewdest budget deal he could get with Joe Biden in the White House and Chucky Schumer reigning over the Senate. Johnson was outnumbered and outgunned, but he managed to get some modest cuts in spending. Congratulations.
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Biden has nearly single-handedly added $6 trillion to the debt in just three years. This wasn’t a bipartisan spending spree. It was all the unholy trinity of Biden, Pelosi, and Schumer. His plan for the future is for the debt to top $50 trillion over the next decade. That’s not a solution, but the act of a psychopathic big spender. To solve the problem he wants bone-crushing taxes that will sink the economy.
Moore offers this bar chart to show the numbers, but I don’t know what the scale of the Y-axis is:
Of all the crises we currently face, I think our profligate spending, compounded by ruinous follies like “green” energy, has the most potential to destroy the republic.
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