America is now almost $35 trillion in debt. John Stossel writes the government is “spending so much that they’re increasing our debt by a trillion dollars every 100 days.”
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I don’t give a crap which party is at “fault.” Fault is silly when you’re looking at the catastrophe on the horizon. When the entire rickety economic structure of kite string, chewing gum, and duct tape comes crashing down on our heads, what will it matter who’s to blame? Aside from the selfish personal satisfaction one party or the other will feel, there can be no sense of triumph or relief. The grim reality of worthless money and destroyed bank accounts along with the destruction of lives is a nightmare.
And that day is approaching.
The Congressional Budget Office released an update on its projections for the budget deficit and with it, an update on the projected national debt.
The federal budget deficit will hit $1.9 trillion this fiscal year, according to an updated projection released Tuesday by the Congressional Budget Office. That’s 27% – or $400 billion – larger than the agency estimated in February.
Looking longer term, the nation’s debt will approach $57 trillion in fiscal year 2034, nearly $2.5 trillion higher than previously projected, as spending on Social Security, Medicare and interest payments soar and revenues fail to keep pace. The growing imbalance is expected to loom large over upcoming congressional budget and tax battles.
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The short-term imbalance is all Biden’s fault. But whoever follows Biden isn’t going to do any better. That’s because the spending increases are baked into our budget. The amount of spending we can actually control, known as discretionary spending, is less and less of the total budget.
“In the 1960s, two-thirds of total federal spending went to fund discretionary programs. In 2023, discretionary spending accounted for 28% of the budget,” about $1.7 trillion. according to the Peterson Foundation. The rest of the $6.13 trillion in federal spending is mandatory entitlements, including Social Security and Medicare. As long as those entitlements remain “untouchable,” the United States will eventually collapse.
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But it’s not all a problem with mandatory spending. Joe Biden chose to add $145 billion to the budget deficit this year because of his election-year student loan forgiveness gambit.
Most of the spike in the fiscal 2024 deficit stems from four factors that are expected to boost projected spending. The largest is a $145 billion increase due to changes the Biden administration made to student loan repayment plans and a new, proposed forgiveness program that would waive some accrued interest for millions of borrowers. The latter has yet to be finalized but could take effect as soon as this fall.
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For the long term, the numbers can’t get any grimmer or more unfathomable. Can anyone really wrap their heads around $57 trillion? Or a $2 trillion deficit every year as far into the future as the CBO can project?
Newly enacted legislation is increasing projected discretionary spending by $60 billion, and estimated spending on Medicaid is about $50 billion higher because actual outlays so far in fiscal year 2024 have been larger than expected. The fiscal year began on October 1.
The cumulative deficit over the 2025 to 2034 period is now projected to be 10% – or $2.1 trillion – larger, the CBO said.
As long as foreign countries continue to buy our bonds and finance our debt, we’ll be able to keep our nose above water. But any kind of economic catastrophe elsewhere in the world might upset the whole apple cart and bring the U.S. down.
