WASHINGTON, D.C. – You can avoid reality, but you cannot avoid the consequences of avoiding reality. Those consequences draw ever closer with each passing moment of unprecedented profligate spending by the federal government. That spending hit a record in fiscal 2019, with the federal government spending more than $3 trillion in the first eight months of the budget year for the first time in history.
The record $3,013,541,000,000 that the federal government spent in October through May of fiscal 2019 was $181,157,920,000 more than the previous record of $2,832,383,080,000 (in constant May 2019 dollars) that the federal government spent in October through May of fiscal 2009.
One key difference between 2019 and 2009? A decade ago the United States (and the world) was in the grips of an historic financial crisis with the economy in the tank and Big Government to the rescue. Fast forward 10 years and we’re breaking reckless spending records while the economy is ostensibly humming and unemployment is at rock bottom. If there is no restraint whatsoever during ‘good time.’ how exaggerated does this spending become when ‘bad times’ inevitably return and people clamor for Big Government’s ‘help.’
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Unlike an average American household, of course, Big Government spending goes on regardless of how much money is coming in the door. Even now, with tax revenues through those same eight months at almost $2.3 trillion, a near record, the overspending has already resulted in a $738 billion deficit to add to our more than $22 trillion national debt.
If the economy slows, and government revenues sink, while spending keeps accelerating, we will smash $1 trillion annual deficits.
Sen. Bernie Sanders (S-VT)and Rep. Alexandria Ocasio-Cortez (S-NY) may subscribe to the belief that no government debts really have to be paid back, but for those with a realistic understanding of economics that accounts for the real human costs of runaway spending, debt and the inherent disrespect of taxpayers’/consumers’ capital the current trajectory is unacceptable.
That is why a select few politicians are intent upon arresting the pace of federal spending. For example, Sen. Rand Paul (R-KY) has introduced the ‘Penny Plan’ multiple times to reduce and eventually balance the federal budget. Unfortunately, but unsurprisingly, Congress cannot even stomach cutting two pennies out of every dollar over five years to balance the budget.
A closer look at the spending reveals it is healthcare, via the Department of Health and Human Services (Medicare, Medicaid) costs Americans the most money. In the first eight months of fiscal 2019, the DHHS spent more than $834,000,000,000! Then comes Social Security at $730,000,000,000.
This goes to show that tackling out or control spending requires addressing healthcare and entitlement spending in a bold way. We’ve seen the results of government intervention in healthcare and redistribution programs play out and it’s time to acknowledge that shrinking the government’s role in such areas is what is needed.
It would come as a sad surprise to our Founding Father that our nation’s defense — the only constitutionally prescribed function of the United States federal government and to which we dedicate more money than any country in the world by far — only reaches third on the list of spending totals. The DHHS and Social Security spending, combined, is more than 3.5 times what we spent on the Defense Department.
Notice, too, that $269 billion was paid in net interest on the current debt. As the debt grows, those interest payments balloon, and in so doing become a bigger hole in the US fiscal boat.
As 2020 election season heats up, the issue of runaway spending, as well its contributing factors of healthcare costs and government redistribution, must be made a top issue if there is to be any hope for avoiding running over a financial cliff. If America simply tolerates either side of the aisle spending us into oblivion, avoiding reality, the consequences of that reality will come calling at the worst possible time.