(The Center Square) – A federal watchdog reported that Congress continues to spend more money than it collects in taxes.
The U.S. Government Accountability Office’s audit of the federal government’s financial statements found it “continues to face an unsustainable long-term fiscal path.”
In fiscal year 2022, the federal government spent $6.27 trillion and collected $4.9 trillion in revenue, resulting in $1.38 trillion deficit, according to the U.S. Treasury. The federal government budget most recently had a surplus in 2001, one of five times it had a surplus in the last 50 years.
Daniel Smith, an economics professor at Middle Tennessee State University, said overspending at the federal level is no surprise.
“It has been known by economists and politicians for a while that our current level of spending is unsustainable,” he said in an email to The Center Square. “Our current debt to GDP ratio ranks the United States as one of the highest in the world. Most of the other countries in that category are not doing well economically. And, the United States’ debt is under-reported because it doesn’t include unfunded liabilities, which raises our debt to over $200 trillion.”
While the federal budget may have many decimal places, Smith said most Americans understand that “you can’t sustainably spend more than you earn.”
“Debt can be undertaken if it is used for productive investments, but is a bad idea for funding current consumption,” he said. “Most of what the U.S. is spending money on, of course, is current consumption (transfers), not productive investments.”
He also said the federal government is moving toward “a situation where debt service cost can potentially become the biggest budget item of the U.S. government.”
Michael Hicks, director of the Center for Business and Economic Research at Ball State University, said while most Americans understand the problem, “few appreciate the size or source of the issue.”
“For example, we could eliminate all foreign aid and the entirety of the military, and all military retirement pay and all Veterans Affairs benefits, and still not have balanced the budget last year,” he told The Center Square. “Alternatively, we could eliminate the growth in Medicaid spending from the Affordable Care Act, and all [Temporary Assistance for Needy Families], [Supplemental Nutrition Assistance Program] and other cash assistance programs, and still not balance the budget.”
Hicks said balancing the federal budget would require some combination of deep cuts to Social Security, Medicare and Medicaid spending along with “much higher taxes.”
Donald Grimes, a regional economic specialist at the University of Michigan, put it down to the growth of spending on Medicare, Medicaid, and Social Security.
“I don’t think people understand this, which is why claiming we don’t need to do anything about these programs’ cost is so politically popular. Since I don’t think we are going to cut spending on these programs by any significant amount I don’t see any other realistic alternative to solving this future crisis other than implementing a national value added tax,” he told The Center Square. “The idea that you can raise the necessary amount of money by just taxing the rich is a Santa Claus fantasy. Other countries realized that the only way they can raise the money to pay for these programs is a value added tax, eventually so will we.”
A value added tax, or VAT, is a consumption tax paid at every stage of a product’s production from the sale of the raw materials to final purchase. U.S. states have sales taxes, which are paid by consumers at a product’s final point of sale.
The U.S. Government Accountability Office’s 270-page financial audit also said it can’t opine on the accuracy of the government’s bookkeeping because of ongoing problems. Among the problems: Long-standing financial management issues at the Department of Defense and inadequate accounting for transactions between government agencies. It further outlined problems with the Small Business Administration’s pandemic relief programs, the Department of Education’s loan programs and $247 billion in improper payments. An improper payment is one that should not have been made or that was made in the wrong amount. Improper payments include overpayments, underpayments, along with payments made to the right recipient in the correct amount but not in line with regulations.
Watchdog reports U.S. on ‘unsustainable’ financial path
And that path is called Liberalism.
IT matters not what that watchdog said. THE LIBTARD american haters in office, WILL KEEP US ON THIS PATH, till they RUIN US.
I’ve been saying for decades that the reckless spending of liberals for their own reelection campaign purposes, will doom us as a nation. Back then, our debt was around 3 TRILLION dollars!
I know our country has carried a national debt since our founding, so maybe we’ve just gotten too used to the idea of spending more than we bring in, but just think of what we could have done with all the money we’ve spent on interest over the years!
The biggest issue however, is that in a few years, the debt will be so large, that interest will eat up most, then all of our income. What happens then? At some point, we will default on loans, the economy will burst like an over inflated balloon, and the whole world will suffer as a result.
Politicians on BOTH sides of the aisle are at fault! DemonRats and RINOs alike are the biggest contributors of course, but without some drastic action, there will be no turning back.
Trump, for all his foibles, at least got the economy going so we would have a chance at recovery. He did spend a lot on programs that needed to be rebuilt, and then the pandemic response was much more expensive than it needed to be thanks to the false narrative put forth by Fauci and company.
There’s no easy answer, because for generations, politicians took the easy route, and spent like drunken sailors to avoid the hard decisions. Guess what? There’s always a reckoning, and that day’s coming soon!
We’re on a unsustainable path in more ways than one. If we don’t get an administration in DC that can get this country turned around on all levels, we’ll just think we’re hurting now.
Everyone saw the riots in Greece etc, over THEIR “Austerity measures”.. NOW MULTIPLY those by 20000!
I have been studying the Fairtax proposal. It is a sort of VAT but instead of adding it replaces the Fed. taxes. I still feel that our Gov should be budgeted and only spend what they take in. Instead of stealing or cutting SS/Medicare they can stop spending money to others and curtail themselves, their programs that only they benefit from, salaries etc. The one thing that is true is Congress has no restraints on spending the People’s money.
can we be saved —
yes-but it will be painful -but needs to be done-
how you ask–
abolish the fed-there must be several ways to correct this monster-
and eliminate the huge interest monster-
remove social security from the general fund and keep it on its own –
may have to increase the deduction from payrolls-but it should not be
an inordinate amount
institute a line item accounting for all spending-
make sensible year to year ceiling caps and keep to them-
pass a law that all bills and ordinances be stand alone–no riders or pork barreling-
cap all state sales taxes at say 8% and institute a national sales tax of maybe 1 or 2 %
work with businesses in america to keep businesses in america with american workers-
and have a flat tax across the board of 1% on total gross business -win or lose-so they
don’t have to fudge their earnings -since they still have to pay even if they try to claim
large losses-let them earn money -they stay in business and they employ workers-
these are just a bare minimum -there should be plenty of other ways to become more productive
Make a FLAT 10% income tax. PERIOD.
No deductions. No ‘allowances’. NO LOOP HOLES.