Biden's reckless spending is unsustainable
Biden’s Fiscal Year 2023 budget results in a cumulative increase of $13.5 trillion, or 43% higher than it is now. The national debt increases from $31.3 trillion in 2022 to $44.8 trillion by 2032.
The U.S. government is once again facing the issue of the national debt ceiling, which limits the amount of debt that the government can incur to $31.4 trillion as approved by Congress. However, the current debate surrounding the debt ceiling is not primarily about the debt itself, but rather about who gets to decide government spending levels. As spending is a key area of control for politicians and bureaucrats, it is a topic of significant importance to them. President Biden has refused to negotiate with the new Congressional leadership about accepting any spending reductions as a condition for raising the debt ceiling. Despite his claims of reducing government debt by over $1 trillion in one year, this decrease is largely attributed to a reduction in spending caused by the coronavirus pandemic and government-mandated lockdowns, rather than any actions taken by the President.
The national deficit is set to rise significantly as a result of the recently passed Fiscal Year 2023 omnibus appropriations package, which will greatly increase spending in the current fiscal year and the future. The budget includes numerous pork-barrel spending items, and the 9% increase in appropriations will bring the total base appropriations to 37% higher than the FY 2017 levels, resulting in a $655 billion increase in discretionary budget authority over the next decade, or $740 billion when including one-time emergency funding for Ukraine and disaster relief. That's enough to increase debt by roughly 2 percent of Gross Domestic Product (GDP) by the end of the next ten years. Since Russia invaded Ukraine in February 2022, Congress has approved over $113 billion in aid and military assistance to support the Ukrainian government and allied nations.
In a rational world, government spending would not exceed tax revenues, but in the current political climate, this is not the case. Governments tend to want to spend more than they collect in taxes, and therefore resort to borrowing to make up the difference. However, this approach is becoming increasingly unsustainable due to President Biden’s inflationary policies, as the government must spend more while the cost of borrowing increases. As a result, this fiscal year’s appropriations have grown at a faster rate than inflation or economic growth, and represent the second-largest percent increase in over a decade.
The recent increases in spending for the Fiscal Year 2023 are cumulative, resulting in discretionary spending that is 37% higher than in Fiscal Year 2017. This includes a 31% increase in defense spending and a 43% increase in non-defense spending. However, when compared to the growth in price levels as measured by the Chained Consumer Price Index and the growth in total economic output, this level of spending is not sustainable. The cost of paying interest on the government’s borrowed money has become the fastest-growing part of federal government spending.
Under Biden’s proposed Fiscal Year 2023 budget, the average annual debt growth is projected to be 4.39% between 2023 and 2032, resulting in a cumulative increase of $13.5 trillion, or 43% higher than it is now. In contrast, a balanced budget spending path would result in a 1.39% growth debt rate, a cumulative increase of $5.7 trillion, or just 18% higher. President Biden’s spending proposal is 2.4 times the rate of a balanced budget path. The proposed budget would result in the national debt increasing from $31.3 trillion in Fiscal Year 2022 to $44.8 trillion by 2032.
Credit to Craig Eyermann and the Independent Institue for the chart and my take of his key findings.