Millions of American families are reeling from the worst wave of inflation in more than four decades. Declining purchasing power and shortages of basic commodities, such as infant formula, have caused consumer confidence to plummet to record lows.
Those who look to Washington for real solutions will be left behind. The Biden administration and congressional Democrats are promoting tired, failed policies: no more federal micromanagement, bureaucracy, handouts to political allies, and threats of job-killing tax hikes.
When it comes to inflation, the direction elected officials take with respect to federal spending is vitally important. Excessive spending has been a major driver of inflation, as Capitol Hill and the Federal Reserve poured trillions and trillions of dollars into the economy and ignited the inflationary fire. Yet, surprisingly enough, there are plans to add even more monetary essence.
The table below shows the staggering extent of this irresponsibility.
From March 2020 to June 2022, the federal government added $7 trillion in debt.
To put that into perspective, the federal debt totaled $7 trillion in 2004, covering a period from George Washington to George W. Bush’s first term.
This means that the federal government has racked up 215 years of debt in just 27 months.
While a certain amount of deficit spending might have been hard to avoid at the worst of the COVID-19 pandemic, Washington continued to pull out the credit card to pursue a wasteful, wasteful spending spree, oversaturating the economy and making the inevitable inflation problems.
Although the absolute amount of debt is important, a more important long-term figure is the amount of debt relative to the size of the economy. As the graph above shows, this metric is also going in the wrong direction.
The federal government has only reached this amount of debt once, after a combination of the longest economic downturn and the greatest military struggle in history.
Although the country has faced challenges in recent years, none reaching the scale of World War II or the Great Depression, which means there is no excuse for adding so much debt if rapidly.
Vitally, in the aftermath of World War II, federal spending as a share of the economy contracted from 41% in 1945 to 11.4% in 1948, making debt repayment easier.
The Biden administration, ignoring this history, is planning the exact opposite; namely, more spending, more debt, and more concentrated power for the Washington swamp.
The following chart reveals exactly how reckless President Joe Biden’s government budgeting is.
The size of the annual deficits and the total accumulated debt are already astronomical. Unfortunately, these huge amounts pale in comparison to the unfunded liabilities facing Social Security and Medicare. Spending on both programs has been growing faster than the economy for decades and is expected to continue growing indefinitely, making them unsustainable.
There are no easy solutions to deal with these programs. However, one fact is indisputable: the longer Congress waits to implement the reforms, the more difficult the choices will become.
Congress has made it easier for members to ignore the growing problem of unfunded benefit programs by making them “mandatory,” meaning spending happens year after year, lawmakers pass bills or even care about budgets. As the chart above shows, mandatory spending now dominates.
The amount of federal spending that occurs automatically has grown steadily over the past century and is expected to continue growing in the future. Yet it is exactly expenditure that is growing the fastest; meaning it should receive more attention, not less.
Despite this stark reality, some members of Congress believe we need to go even further in this direction. For example, two House Democrats introduced the People Over Pentagon Act to cut national defense spending by $100 billion.
The graphs above and below disprove the premise behind such messages. Not only is national defense no longer the dominant aspect of federal spending, but it is also rapidly becoming an afterthought. The idea that Washington is doing too little to redistribute wealth flies in the face of reality.
Considered in dollar terms, the rapid growth of non-military spending becomes even clearer. Congress has added hundreds of programs to the federal ledger over the past century, most of which receive spending increases each year.
Yet the left’s appetite for taxpayer-funded resources does not seem to be sated. Activists want ‘Medicare for All,’ a Green New Deal, massive college loan forgiveness and monthly checks, even if we can’t afford the bloated federal government we have today.
While the likes of Independent Socialist Senator Bernie Sanders of Vermont argue that all of this would be possible if Uncle Sam shook off the rich, the math just doesn’t add up. The only way to pay for a drastically larger government would be to impose drastically higher taxes on the middle class, which is common throughout Europe.
The largest category of federal spending is health care. Resources for Medicare, Medicaid, Obamacare grants, etc. are a driver of long-term fiscal imbalances and partly explain why medical costs had above-average inflation before the current crisis.
Congress can prevent rising health care spending from bankrupting the country by reforming Medicare to promote more choice and lower costs for beneficiaries.
From today’s inflation to tomorrow’s growing deficits, America faces headwinds. Yet there is still time to meet these challenges and remain the greatest nation in the world if our citizens and leaders are prepared to recognize the problems and make the tough decisions.
Don’t start next year, or when one party has a firm majority in power. From now on.
This piece originally appeared in The Daily Signal