From article Debt, Deficits, and Default in President Biden’s State of the Union. Romina Boccia, Cato.
President Biden devoted quite a few lines in his State of the Union address to making various claims about deficits, debt, and the debt limit.
Some of President’s Biden’s statements, with my comments:
…
“In the last two years, my administration cut the deficit by more than $1.7 trillion — the largest deficit reduction in American history.”
DEFICITS DECLINED DUE TO COVID-19 EMERGENCY SPENDING WANING, NOT BECAUSE “THE ADMINISTRATION CUT THE DEFICIT.”
President Biden is claiming victory over deficits when his administration’s policies significantly increased deficits for the next decade and beyond.
…
From the American Rescue Plan, to the infrastructure law, to new subsidies for a range of industries from clean energy and climate to semiconductor manufacturing, to student loan forgiveness, THE ADMINISTRATION HAS INCREASED DEFICITS BY SEVERAL TRILLIONS OF DOLLARS.
…
Important context lacking from President Biden’s claim is deficits are still historically high.
AT CURRENT LEVELS, THE DEFICIT COMPARES TO DEFICITS DURING THE GREAT RECESSION—THE FIRST TIME IN U.S. HISTORY DEFICITS EXCEEDED $1 TRILLION.
Deficits reached unprecedented levels of $3.1 trillion in 2020 and $2.8 trillion in 2021.
It’s only from such excessive levels and due to COVID-19 waning as a public health emergency that the $1.4 trillion deficit concluding 2022 looks small in comparison.
…
The Congressional Budget Office projects DEFICITS WILL AVERAGE $1.6 TRILLION EACH YEAR OVER THE NEXT DECADE AND GROW FROM THERE.
Instead of a misguided victory lap for being President at the tail‐end of a historic pandemic during which spending skyrocketed, President Biden should work together with Congress to put federal spending on a sustainable path, rein in deficits, and stabilize debt as a share of the economy.
…
“Under the previous administration, America’s deficit went up four years in a row. Because of those record deficits, no president added more to the national debt in any four years than my predecessor. Nearly 25% of the entire national debt, a debt that took 200 years to accumulate, was added by that administration alone.”
President Biden is correct, spending is a bipartisan problem.
Republicans in Congress tend to push harder against government spending when a Democratic President occupies the White House.
Which might explain why DEFICITS TEND TO BE HIGHER UNDER REPUBLICAN PRESIDENTIAL ADMINISTRATIONS than under Democratic ones.
…
While it’s true that Congress suspended the debt ceiling three times during President Trump’s term in office, these suspensions did not occur without preconditions.
EACH DEBT LIMIT SUSPENSION WAS TIED TO A BIPARTISAN DEAL THAT DETERMINED SPENDING LEVELS FOR DISCRETIONARY PROGRAMS (defense and domestic programs governed by annual appropriations) or provided natural disaster relief funding.
Both Democrats and Republicans regularly use the debt ceiling to negotiate government policy.
…
The responsible choice for the debt limit is to pair any increase with spending reforms that slow the growth in the debt.
If the debt continues to grow rapidly, it will bode ill for the U.S. economy, business investment, and government policy.
HIGH AND RISING FEDERAL GOVERNMENT DEBT SLOWS GROWTH, CROWDS OUT PRIVATE INVESTMENT, limits the government’s ability to respond to unforeseen emergencies, and elevates the risk of a sudden fiscal crisis where investors would lose confidence in U.S. Treasury bonds and the U.S. dollar.
…
The way to ensure “the full faith and credit of the United States of America will never, ever be questioned” is not by raising the debt limit without preconditions, as President Biden demands.
THE WAY IS FOR LEGISLATORS TO ADOPT A CONCRETE FISCAL PLAN THAT WILL STABILIZE U.S. DEBT AS A PERCENTAGE OF GDP—with spending reforms that address the unsustainable growth in federal entitlement programs and adopt credible fiscal restraints to limit discretionary spending.
(end of article)
… …
“Deficits tend to be higher under Republican presidential administrations than under Democratic ones.”
This is not necessarily a bad thing, reducing tax rates create short-run deficits.
Republicans, All Americans, tired of reading, worrying, and complaining about the deficit and debt, or do you actually enjoy zat?
The best way to decrease federal government deficits and debt is to increase federal government deficits and debt, in the short run, by substantially reducing the overall tax rate.
Per Table 2 this will for the next generation eliminate all federal deficits and debt and make millionaires and billionaires of We All in the following generations.
Tax revenue surpluses to be distributed to We All as Citizens’ Shareholder Dividends.
Need:
-substantially reduced overall tax level
-open the U.S. to unrestricted imports and then to unrestricted movement of assets including people, as We have now within the current fifty states
Must not protect nor reject Americanism but rather project tHAT.
Comments
Post a Comment