by Mike Maharrey, Gold Seek:
In one of the biggest economic stories of the year that nobody seems to care about, the Biden administration ran the third-largest budget deficit in history in fiscal 2024 and paid over $1 trillion just on interest payments on the debt.
This is the kind of borrowing and spending one would expect during an economic crisis. The only bigger annual budget deficits both occurred during the COVID lockdown era. Before that, the Obama administration ran the only trillion dollar-plus deficits during the Great Recession. (The Trump administration was on pace for a trillion-dollar-plus deficit in fiscal 2020 before the pandemic.)
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And yet here we are, in what is supposed to be a “robust” economy, with a crisis-like budget deficit.
Perhaps the “robust” economy is an illusion created by the government deficit spending.
The Numbers
According to the final Monthly Treasury Statement of fiscal 2024, the federal government spent $1.83 trillion more than it took in.
The budget deficit was 8 percent higher than the 2023 shortfall.
The budget gap represents 6.4 percent of GDP, up from 6.2 percent in fiscal 2023.
Democrats love to blame the deficit on “tax cuts for the rich,” but the rhetoric doesn’t match reality.
Federal tax receipts came in at a record of $4.92 trillion, an 11 percent increase over fiscal 2023.
The real problem is on the spending side of the ledger.
Remember how the Biden administration promised that the [pretend] spending cuts would save “hundreds of billions” with the debt ceiling deal (aka the [misnamed] Fiscal Responsibility Act)?
That never happened.
The Biden administration blew through $6.75 trillion in fiscal 2024, a 10 percent increase over 2023 spending.
Here are just a few examples of spending increases:
- Social Security spending was up 7 percent
- Medicare spending was up 4 percent
- Military program outlays increased by 6 percent
This tells you everything you need to know about government promises of spending cuts. Government people always find new reasons to spend money even as they pontificate about fiscal responsibility. Whether it’s a domestic crisis or a war, government spends more and more. This is why the deficits continue to expand – not because of some imagined lack of sufficient revenue.
And it’s not just Democrats spending like drunken sailors (with apologies to all the drunken sailors out there).
Prior to the pandemic, the U.S. government ran budget deficits of over $1 trillion just four times — all by the Obama administration in the aftermath of the 2008 financial crisis.
But the Trump administration almost hit the $1 trillion mark in 2019 and was on pace to run a trillion-dollar deficit in fiscal 2020 before the pandemic, even as the U.S. supposedly enjoyed the “best economy” ever. The economic catastrophe caused by the government’s response to COVID-19 gave policymakers an excuse to spend with no questions asked, and we saw record deficits in fiscal 2020 and 2021.
