The Federalist: Economic Collapse Is Imminent If We Can't Stop Our Deficit Spending Spree
Article by Bob Anderson in Federalist
In life, calamity can occur when we fail to recognize risks and act on them. With our attention now focused largely on riots, what if one of the most important issues threatening our economic future, and thereby our nation, is being largely minimized or ignored? Have we neglected the risk of our national debt?
A Spending Spree Makes Our Problems Worse
Consider that when President Richard Nixon took the dollar off the gold standard in 1971, the accumulated debt of the United States since the founding of the nation was about $400 billion, which equates to roughly $2.6 trillion in current dollars. To float government-mandated shutdowns over COVID-19, Congress passed the CARES Act at a price tag of $2 trillion.
Congress is negotiating another round of bailout spending that will likely cost between $1 trillion (Republicans) and $3 trillion (Democrats).
Assuming the most conservative outcome of $1 trillion, that will put the total spent on shoring up the deliberately hobbled economy around $3 trillion. That means in the course of less than a year, to counter one pandemic, the United States has spent, and therefore borrowed, more than the total debt incurred from the time our Constitution was signed in 1787 to Nixon’s action in 1971.
It doesn’t take a Ph.D. in economics to understand the gravity of this kind of spending, but still, economists defend it to worried members of Congress on the basis that we have no choice. The airplane must keep flying, weather be damned. The experts are experts at minimizing risk.
We’ve become accustomed to addressing all our problems with more spending. When Barack Obama was inaugurated president in 2008, the federal debt had ballooned to $11 trillion. When Donald Trump arrived eight years later, it had almost doubled to $20 trillion. The debt clock now stands at $26,647,860,701,599 as I type this, soaring upward at a dizzying pace, and critically important “off balance sheet” liabilities for future obligations such as Social Security and Medicare have been estimated at triple that number. At what point must we question our national solvency?
For the average American, the verbiage of millions, billions, and trillions causes the whole thing to lose meaning. Who can contextualize so many digits? Does it matter, when the median individual income in the United States is roughly $34,000, and each taxpayer, 151 million of us, owes ...
To read this article in Federalist in its entirety and view the relating charts, click here.