In a Wall Street Journal op-ed on Tuesday, Joe Biden curiously cast himself as a deficit hawk. He even suggested that his fiscal prudence is key to lowering inflation. If so, fasten your seatbelts, for we’re in for quite an inflationary ride.
“We need to keep reducing the federal deficit, which will help ease price pressures,” Biden writes. So far, so good (more or less). Federal spending is indeed out of control, and this has contributed to inflation. But Biden then claimed credit for allegedly getting our fiscal house in order: “Last week, the nonpartisan Congressional Budget Office projected that the deficit will fall by $1.7 trillion this year—the largest reduction in history.” He added, “This deficit progress wasn’t preordained.” In other words, it happened because of his leadership.
The truth, as I write in the Claremont Review of Books (CRB), is that Biden already has earned a place on the Mount Rushmore of deficit spending. According to the Congressional Budget Office (CBO), his American Rescue Plan Act (ARPA) added a whopping $1.115 trillion in deficit spending last year alone (see table A-1 on p. 60). To put into context what a massive increase in deficit spending that piece of legislation brought about, $1.115 trillion exceeds our total deficit spending in all but five prior years on record, and that’s even after adjusting for inflation. (Four of those five years involved Biden as vice president.) Put otherwise, Biden’s ARPA added more deficit spending in 2021 than we racked up in any of the four years of World War II—again, even after adjusting for inflation.
This year, the ARPA is adding only $500 billion to our deficit, per the CBO—and Biden wants credit.
There’s a scene in Charlie Chaplin’s classic film “The Kid” in which the kid goes around breaking windows and the tramp (Chaplin’s character) goes around fixing them and getting paid in the process. Biden’s approach is reminiscent of this except that instead of actually fixing any windows, he just didn’t break as many the following year.
As for the deficit this year that Biden is so proud of, the CBO projects it will clear $1 trillion. We’ve only cleared that figure six times before, and all six have involved either COVID or Obama-Biden. Even in inflation-adjusted dollars, we never had a $1 trillion deficit in any year prior to 2009. During the year that American troops stormed the beaches at Normandy, our inflation-adjusted deficit spending was $568 billion (in 2012 dollars).
Moreover, the CBO now projects that the national debt held by the public (the part of our debt that really matters and is fueled by deficit spending) will hit $24 trillion this year and will eclipse $40 trillion a mere decade later. This is a product of the rampant deficit spending that Biden claims is under control.
The CBO also reports that since the projections it made last July, “Legislative changes increased projected deficits by $2.4 trillion [over a decade], mostly because of increases in discretionary outlays resulting from provisions of the Infrastructure Investment and Jobs Act . . . and the Consolidated Appropriations Act, 2022.” Those are two other pieces of legislation with Biden’s name in the signature block.
Not to mention that Biden has fought hard to get another bill passed that calls for even more deficit spending, his “Build Back Better” proposal. Only Republican unity and Senator Joe Manchin’s (D-W. Va.) fiscal good sense have kept that bill from exacerbating our fiscal irresponsibility.
As I write in the CRB,
“For all of the myriad cultural, technological, and moral problems we face, few things would guarantee the undoing of the founders’ experiment in self-government more surely than continuing to pile on the burden, to ourselves and our posterity, of runaway debt. Thomas Jefferson described fiscal profligacy as a precursor to inevitable misery and suffering, the first in a stampede of apocalyptic horsemen. ‘[T]he fore horse of this frightful team is public debt,’ he wrote. ‘Taxation follows that, and in its train wretchedness and oppression.’ This wretchedness will only be more keenly felt as interest rates rise. Too much debt puts power in the hands of our enemies and renders the average American poorer every year.”
In 2019, the last pre-COVID (and hence somewhat “normal”) fiscal year, for every $12 that Americans paid in taxes, the first $1 essentially just went into the trash—it was used to pay interest on the debt, not to buy anything. A lot more than 1/12 of taxpayers’ contributions will be wasted going forward if interest rates and the national debt keep rising in tandem—as they almost certainly will.
Since the Tea Party arose in reaction to runaway spending and Obamacare, our national debt has more than doubled, from less than $12 trillion in 2009 to more than $30 trillion today. It’s hard to say which is more ludicrous—for Biden to suggest that our debt woes are fading into the sunset, or for him to claim to have ridden to the rescue when he has clearly thrown gas on a prairie fire.