Federal Spending Pandemic Continues Unabated
Even with the federal government ostensibly trying to limit spending with its head against the debt ceiling, it managed to run another massive deficit in November.
The budget shortfall last month was $191.34 billion, according to the latest Treasury Department statement. That was 31.7% higher than the November 2021 deficit.
This comes on the heels of the second-largest annual budget deficit in history. Uncle Sam spent $2.77 trillion more than he took in during fiscal 2021.
Of course, the spending isn’t slowing down.
The Biden administration blew through another $473 billion in November. That brings total federal spending to just shy of $1 trillion ($922 billion) in just the first two months of fiscal 2022.
Spending so far in fiscal 2022 is about 4% higher than it was through the same period in fiscal 2021.
The only thing keeping the deficit from ballooning even faster is a sharp increase in revenue collection with the economy recovering somewhat from the pandemic. Uncle Sam collected $281.2 billion last month. Total government receipts through the first 2 months of fiscal 2022 are 23.6% higher than the same period in fiscal 2021.
Simply put, an easing in coronavirus has done nothing to ease the pandemic of federal spending.
As of Dec 9, the national debt remained just shy of $29 trillion ($28.91 trillion), locked at that level thanks to the debt ceiling. But that spending limit is about to be brushed away as Republicans have reached a deal to allow Democrats to raise the debt ceiling. When it does, the Treasury Department will have to go on another massive borrowing binge to cover this and future deficits.
The US government added $480 billion to the debt in October after Congress passed a bill increasing the federal debt ceiling by that amount.
And there is no end in sight to the spending. Congress has already passed a massive infrastructure bill and it continues to haggle over the “Build Back Better” bill. Supporters of these big spending plans promise tax increases and government savings will “pay for” the spending. But it’s almost certain tax receipts will fall short of projections and spending will be even higher than budgeted. That’s hove government always works.
According to the National Debt Clock, the debt to GDP ratio is 125.92%. Despite the lack of concern in the mainstream, debt has consequences. More government debt means less economic growth. Studies have shown that a debt to GDP ratio of over 90% retards economic growth by about 30%. This throws cold water on the conventional “spend now, worry about the debt later” mantra, along with the frequent claim that “we can grow ourselves out of the debt” now popular on both sides of the aisle in DC.
Every American citizen would have to write a check for $87,127 in order to pay off the national debt. That’s $142 more than last month.
