Federal Deficit Danger

While the national debt surpasses another trillion, President Biden recently touted cutting the U.S. deficit by trillions of dollars while omitting massive government spending over the past two years.

On Sep. 4, President Biden gave a Labor Day speech to a crowd gathered in Philadelphia, PA. 

The federal holiday speech touched on topics like the next presidential election and former President Trump, but Biden made a point to squash all qualms about his administration’s contribution to the federal deficit.

The remarks from President Biden about the deficit came after tumultuous news of how Congress expected the federal deficit to reach $2 trillion by Sep. 30.

President Biden, however, claimed he severely lessened the federal deficit despite approving legislative packages spearheaded by his Democratic colleagues which caused government overspending and inflation to soar.

After sponsoring and passing multiple bills contributing to the federal deficit, Biden claimed, “‘Unlike the last president, in my first two years — all this stuff, guess what? — I cut the deficit $1.7 trillion, cut the debt $1.7 trillion,’ the 80-year-old president said, conflating the basic budget terms after he touted new infrastructure spending,” according to the New York Post.

Extraneous government spending from the past Democratic 117th Congress rewarded the nation its worst records of inflation in forty years, which has caused the current Republican House of Representatives to try its best to bandage the financial wounds Democrats like House Speaker Nancy Pelosi left unattended.

Since big government spending only increases inflation, the Federal Reserve has hiked interest rates to staggering numbers to try and curb the inflation disaster gripping the country: “The federal deficit is increasing again in part because of Federal Reserve interest-rate hikes to tame inflation, which has resulted in higher US government costs to finance the nation’s spending,” courtesy of the New York Post.

The U.S. government seems to have spent almost $2 trillion more than it collected in revenue, a dire symptom of irresponsible government financial decisions: “From August 2022 to this July, the federal government spent roughly $6.7 trillion while bringing in roughly $4.5 trillion,” according to the Washington Post, which also reported the economy growing, despite the August jobs report being abysmal and barely reaching any predictions, the unemployment rate increasing to 3.8% and pay gains slowing.

Simply put, the government overspent and now is having trouble paying its bills, costing everything government-related to increase to stay afloat.

In addition, due to the stock market’s lackluster performance last year, the Department of the Treasury is expected to take in much less revenue than in previous years.

“The Treasury Department is also on track to take in substantially less … Automatic adjustments to the tax brackets to account for inflation also reduced tax obligations for many Americans, resulting in less incoming revenue relative to last year.
“Then a number of other spending increases contributed to the rising deficit — Social Security payments increased because they are indexed to inflation; the government spent more on education, veterans benefits and health care; and the bipartisan infrastructure law, as well as the 2022 Inflation Reduction Act, started sending billions of dollars out from the government’s accounts,” according to the New York Times.