Washington D.C.’s Excessive Spending Bill Comes Due
It was time to file federal income tax returns for 2022 last week. Brian Riedl calculates what the average cost is projected to be for an American household before dropping the hammer.
This year, Washington will collect $36,313 per household in tax revenues (this includes all federal taxes, as even business taxes are eventually passed on to individuals).
Washington will spend $46,834 per household.
That $10,521 difference is money the U.S. government has to borrow to sustain its spending. As Riedl notes, the household cost of federal taxes has grown by $4,800 since before the pandemic. Still, federal spending outpaced it, growing $6,300 per household over that time.
That’s not a recipe for achieving fiscal stability. Now that the pandemic emergency is officially over, it’s time to rein in spending and make it grow more slowly than tax collections.
That need is all the more urgent because, as a share of the economy, the national debt has reached levels not seen since the World War 2 Era. That’s all the more urgent because of what else Riedl reports:
Federal spending for the first half of fiscal year 2023 is up 13% over the same period last year.
Within that total, Social Security and Medicare costs are up 10%, Medicaid spending has risen 8%, and interest costs on the national debt have jumped a remarkable 40%.
Of these problems, the surge in the cost of servicing the national debt has become the fastest-growing category of the U.S. government’s spending. With such a large national debt, the cost of rolling it over is rapidly becoming unaffordable with the combination of excessive spending and rising interest rates.
After World War 2’s end, the U.S. government’s primary tool to put its fiscal house in order was stopping its wartime spending. With the pandemic emergency now over, it’s time to follow that successful example and stop emergency pandemic spending.
This is a straightforward, no-brainer policy toward putting the U.S. government onto a more sustainable fiscal path. What does it say about today’s politicians that it’s only now coming up as part of a bill to raise the debt ceiling?