U.S. Treasury Secretary Confirms an Inconvenient Truth: Government Has a Spending Problem
It’s not often a cabinet official acknowledges that the U.S. government has behavioral flaws, but that’s exactly what happened on January 23, 2020, when U.S. Treasury Secretary Steven Mnuchin confirmed that the U.S. government has a spending problem.
Treasury Secretary Steven Mnuchin said on Thursday the U.S. government cannot sustain federal deficits growing at current levels and will have to slow the rate of spending….
In an interview with CNBC, Mnuchin said increased military and non-military spending was the cause of the deficits, not the tax cuts pushed through Congress by Trump in late 2017….
“If you look at the increase in the deficit, a significant component of that is additional government spending,” he said.
“There’s no question we need to slow down the rate of growth of government spending because we can’t sustain these deficits growing at these levels.”
He’s right. The chart below shows the U.S. government’s cumulative spending and tax revenues by month for each fiscal year from 2016 through 2019, along with the first three months for the government’s 2020 fiscal year, which began last October. Even though large tax cuts were implemented in 2018, the U.S. government’s total tax revenues went up, not down, when compared with previous years.
What has also gone up, alas at a much faster rate, is the U.S. government’s spending, where fiscal restraint has gone out of style in Washington, D.C.