The U.S. surpassed a new milestone that we should not celebrate. The national debt crossed the $34 trillion mark for the first time.
According to data released by the U.S. Treasury, the national debt–which measures what we owe creditors to pay for expenditures–topped $34.001 trillion just before the end of the year. Furthermore, this $34 trillion debt milestone comes a little more than three months after crossing the $33 trillion mark.
The national debt has been rising for decades but this acceleration is spectacular and deeply worrisome. Four decades ago, the national debt had barely topped $4 trillion and is now nearly ten times higher.
The Treasury pointed to several causes for spiking debt over recent years.
Tax cuts, stimulus programs, increased government spending, and decreased tax revenue caused by widespread unemployment generally account for sharp rises in the national debt.
The Biden White House was quick to lay blame on its predecessor. During a press briefing, White House press secretary Karine Jean-Pierre claimed:
If you look at that data, there’s a trickle down debt. If you think about it, Republican tax cuts are responsible for about 90% of it — of the increase in the debt as a share of the economy over the last two decades, excluding emergency spending.
KJP needs a unicorn fact check for claiming that 90% of the increase is due to “republican tax cuts.” It’s false and misleading.
If anything Democrats and Republicans share the blame for significant spending increases, particularly during the pandemic and the Great Recession, but going back as far as the start of the War on Terror. For example, from fiscal year 2008 to 2016, Barack Obama added over $10 trillion to the debt while from fiscal year 2017 to 2020 Donald Trump added $6.6 trillion.
Solutions
The time is now for fiscal sanity. During times when the economy is humming along or growing, our national leaders should be paying down debt and (if possible) building up savings. This is how most Americans approach their finances. Instead, reckless federal spending continues to imperil our national future and will lead to impacts that will hit every household in the future
Where can we cut? Discretionary spending–on items like federal agencies, foreign affairs, and the military–is the easiest place to start. Discretionary spending requires negotiations in Congress over spending levels each year (i.e. a budget).
Over the next two weeks, funding the government will be an issue once again as the stopgap measure to fund the government for the remainder of the fiscal year will expire.
However, most of our federal spending never gets debated or negotiated. The entitlement programs Social Security, Medicare, and Medicaid comprise the majority of all U.S. spending. This non-discretionary spending is on autopilot like the subscriptions that take money from your account each month whether or not you notice.
It’s time for Washington to get a grip on spending. Let’s get back to the days when Congress passed budgets each year that are balanced (i.e. not spending more than the revenue we take in), pay down our debt, and right-size entitlement programs.