Stunningly, the U.S. national debt has reached the previously unimaginable level of 34 TRILLION dollars. Just paying the interest on that absurd sum has become the fourth largest federal budget item, behind only Social Security, Medicare, and defense.
Despite all that deficit spending, little to nothing has been added or improved. Social Security remains on the path to insolvency. Our infrastructure continues to crumble. Our military is underfunded and undermanned. Our navy is second to China in size. Urgent needs, such as protecting our electrical grid remain unaddressed.
It is not from a lack of income. The Treasury Department notes that “If you lived or worked in the United States in 2023, your tax contributions are likely part of the $4.44 trillion collected in revenue. The federal government also collects revenue from services like admission to national parks and customs duties on foreign imports and exports.” The increase in revenue taken by Washington in 2022 was just about a trillion dollars more than 2020, and the national debt continues to grow.
Clearly, giving more money to Washington by raising taxes cannot address or resolve the issue. Indeed, providing more funds to the federal government is the same as giving more booze to an alcoholic in the hopes that it will eventually satisfy the craving.
The crisis affects more than just the government.
House Ways and Means Committee Chairman Jason Smith recently warned that “Rising interest rates, and the associated cost of servicing federal debt, are a direct result of President Biden and Democrats’ inflationary spending spree. Families are already struggling with the highest interest rates in 23 years, raising the average mortgage payment by an extra $1,093 per month since President Biden took office. Everyone from families buying a home, small businesses getting a loan, banks lending money, and hardworking Americans buying a new truck are affected…Washington’s failure to rein in out-of-control spending and debt could prompt bond rating agencies to further downgrade the federal government’s credit rating, leading to declining demand for U.S. bonds. Oversight Subcommittee Chairman David Schweikert (AZ-01) highlighted how the issue of federal interest payments is critical, because it affects every American and most people around the world.”
In its 2023 Annual Report, the U.S. Government Accountability Office (GAO) reported that there are 37 areas designated as high-risk due to vulnerabilities to fraud, waste, abuse, and mismanagement or because they face economy, efficiency, or effectiveness challenges.
Waste and inefficiency are problems, but the greater issue remains Washington’s involvement in and spending on areas in which the Constitution never intended. A Peter G. Peterson Foundation analysis released in July 2023 found that “Over the last four decades, federal grants to state and local governments have made up about 17 percent of their total revenues.” That’s a thorough abrogation of the concept of how America was supposed to be governed, with Washington taking care of foreign policy, defense, and broad national issues while leaving the particulars of everyday life to the states.
Chris Edwards, in a “Downsizing the Federal Government” study back in 2019, reported that “The federal government has a large presence in state and local policy activities such as education, housing, and transportation. That presence is facilitated by ‘grants-in-aid’ programs, which are subsidies to state and local governments accompanied by top-down regulations…Rather than being a positive feature of American federalism, the aid system produces irresponsible policymaking. It encourages excessive and misallocated spending. It reduces accountability for failures while generating costly bureaucracy and regulations. And it stifles policy diversity and undermines democratic control.”
Federal spending on what should be exclusively local issues adds an additional layer of bureaucracy. Combined with a lack of specific knowledge of the particular details involved, it is a recipe for waste.
It is a key reason for that $34 Trillion debt, and as Washington approaches what would be considered bankruptcy for a private entity, it is long past the time when it should be stopped.
Illustration: Pixabay