2021’s Deficit Spending Is Already Out of Control. Here’s Why That’s a Problem.
This morning, President Trump apparently threatened to veto the so-called stimulus legislation recently approved by Congress. The legislation features approximately $908 billion worth of spending including $600 stimulus checks for many millions of Americans who qualify. The stimulus spending is part of a much larger spending package which totals $2.3 trillion and is a general supplemental appropriations bill.
But these numbers by no means reflect what will surely be a much, much larger amount of spending that will take place before this fiscal year ends on September 30.
Indeed, even as we were entering just the third month of the fiscal year in early December, it was already clear that spending in 2021 was likely to be another year of both runaway spending and runaway deficits.
The sheer size and scope of the new spending package, which includes every type of pork imaginable—from propping up foreign dictators to subsidizing huge American corporations—is simply a reflection of the fact that all bets are off nowadays when it comes to federal spending.
Within months of his swearing in, it was already abundantly clear that Trump had no interest at all in cutting spending or scaling back the mountains of debt the US was quickly amassing. And now the Covid Panic has accelerated the process all the more.
Just How Much Has Spending Accelerated?
During the 2020 fiscal year, the total budget deficit reached more than $3.1 trillion. Even if we adjust for inflation, 2020’s total deficit was essentially off-the-charts as far as deficits go:
In 2009, in the wake of the 2009 financial crisis, the deficit reached 1.6 trillion in 2019 dollars. But the deficit nearly doubled that previous high in 2020.
And now, 2021, isn’t looking to be much more frugal than 2020. Even before any new stimulus bill have been signed, 2021’s year-to-date deficit already tops 2010’s previous high for the period. Combining October and November (the first two months of this fiscal year) the deficit is
Article from Mises Wire