Government Must Raise Taxes 40% Or Cut Spending 30% To Achieve Fiscal Balance

Just how bad is the nation’s economy? Bad enough that it would take a tax increase of 40% or spending cuts of 30% to level off the budget.

But, maybe it wouldn’t because of the massive spending packages under Joe Biden, inflation has soared, dragging the prime interest rate ever higher. That means the amount of money just to pay the interest on our current 31.5 trillion dollar debt. But, even if the numbers were to stay the same, it appears to be out of reach.

The budget deficit reflects the difference between federal revenues and expenditures in a year. According to data from the Office of Management and Budget under Joe Biden, the deficit for 2022 was nearly 1.4 trillion dollars.

Joe Biden is bragging that the deficit will drop in a couple of years when the Trump tax cuts expire. That means that Joe Biden is counting on you and me to pay heavier taxes in order to reduce the deficit.

Of course, that will never happen. If more money comes in, the Democrats will insist on spending 125% of the additional revenue.

Democrats oppose using the new revenue to pay down the debt. Money is power and the Democrats are power mad. The pipeline needs a continuous stream of cash in order to buy the allegiance of those who would normally oppose new spending, but enjoy it when it is spent on them.

The analysis said:

“Just like all individuals and businesses, the federal government is subject to a budget constraint: it must fund all expenditures, current, and future, from its tax and non-tax receipts over time. By construction, the fiscal imbalance must be zero for a fiscal policy to be sustainable without future changes.”

Biden brags about his record on the deficit:

“On my watch, things have been different. The deficit has come down in both years that I’ve been in office. And I just signed legislation that’s going to reduce it even more in the decades to come. Now Republicans in Congress are doubling down on their commitment to explode the deficit again. Just this week, Republican leaders said if they get their way, they’re going to extend the Trump tax cuts, which are due to expire in a couple of years.”

From The Daily Wire

The economists forecasted that the fiscal imbalance would equal 7% of the present value of all future gross domestic product over the next 75 years. Restoring order to the federal budget would require across-the-board cuts to programs such as Social Security, Medicare, and Medicaid, across-the-board increases to payroll taxes, individual taxes, and business taxes, or some combination of tax hikes and spending cuts.

The future measures of federal indebtedness were made using the Generally Accepted Accounting Principles established by the Financial Accounting Standards Board, under which companies must report the “present value of shortfalls in their long-term obligations.” Combining current debts with the present value of projected future shortfalls over the next 75 years implies $93.8 trillion of fiscal imbalance.

Republican and Democratic administrations have overseen surges in the national debt over the past several decades. Although President Barack Obama maintained budget deficits as large as $1.4 trillion during his first term, President Donald Trump ran a deficit nearing $1 trillion in 2019, the year before the deficit more than tripled to $3.1 trillion as a result of stimulus spending. Packages greenlit by President Joe Biden will contribute more than $4.8 trillion in new deficit spending between 2021 and 2031, according to an analysis from the Committee for a Responsible Federal Budget, while removing the effect of the American Rescue Plan, a stimulus package approved soon after President Biden’s inauguration, implies $2.5 trillion of new deficits.