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of America Political leaders have a spending problem.
They know that entitlement programs promise benefits far beyond their tax base, but they have done nothing to make them worthwhile. Meanwhile, both parties are demanding more spending increases — despite The national debt is rising to $35 trillion, Or more than $100,000 for every American, rich and poor. Under promising assumptions, debt is projected to increase by more than $20 trillion over the next decade.
Yet despite the predictable outlook, the major presidential campaigns have no plan to deal with the existing structural deficit and are outdoing each other to make it worse. For them, the responsibility stops elsewhere. This might be good short-term politics, but it will make the inevitable bill bigger and more difficult for everyday Americans to pay.
Trump, Harris blamed for ignoring rising budget deficit, while economists urge both to ‘get real’
Some people argue for tax cuts Are responsible for the increasing debt. But as data from the nonpartisan Congressional Budget Office shows, revenues have remained largely flat while spending has increased well above previous levels.
Vice President Kamala Harris and former President Donald Trump aren’t just competing to win the presidency. They are trying to outdo each other. (Getty Images)
Much of the rising debt is hidden in the budgetary cake, and experts have long warned about rising costs as the baby boom generation retires. But rising Social Security payments — which were long projected to rise faster than prices — are only part of the problem. Rising health expenditure, driven by the same demographic factors and rising medical costs, is an even greater challenge.
America’s debt pile has increased further due to massive so-called emergency spending implemented by both parties. During the pandemic, the legislation added more than $5 trillion in debt. The annual interest on the debt now amounts to nearly $1 trillion, more than all federal spending on children and defense combined.
Efforts to balance the budget are repeatedly rejected. As Chairman of the House Budget Committee, one of us routinely proposed and passed balanced budgets, only to have the hope of such discipline dashed by a desire for greater spending. Commissions that seemed important (including a commission called a “Supercommittee”) issued detailed recommendations that were largely ignored.
Experts have presented a large amount of data showing that debt-ridden countries inevitably reach financial crisis, even as proponents of modern monetary theory (MMT) argue that any reduction in spending The amount is not very big. According to MMT advocates, the federal government can always print more money.
Americans have already experienced where inaction lies and where irrational leadership lies. During the pandemic, former Obama Treasury Secretary Larry Summers warned that massive new federal spending would lead to significant inflation, which is exactly what happened, with prices rising 20% since the beginning of the Biden-Harris administration.
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The Federal Reserve’s response caused interest rates to reach their highest level in two decades, helping to raise monthly mortgage payments for the average-priced home by more than $1,000. Low-income Americans spend the lion’s share of their income on housing, so such rising costs are an example of why they suffer the most from inflation and high interest rates.
Yet despite expressing concerns about inflation, both presidential tickets propose even larger deficits. In fact, it seems like they’re on a race to make them worse. Former President Donald Trump proposed exempting tip income from federal taxes, and Vice President Kamala Harris quickly followed suit. Both ignored the 10-year cost of the proposal, which runs into the hundreds of billions of dollars.
Republican vice-presidential nominee J.D. Vance suggested more than doubling the child tax credit from today’s $2,000 to $5,000, which Harris expanded by proposing a payment of $6,000 in the child’s first year. Senator Vance hasn’t provided key details of her plan, but we do know that much of Harris’s plan involves big benefit spending rather than tax relief. Both proposals would cost more than $1 trillion over the next decade.
Yet despite the predictable outlook, the major presidential campaigns have no plan to deal with the existing structural deficit and are outdoing each other to make it worse. For them, the responsibility stops elsewhere. This might be good short-term politics, but it will make the inevitable bill bigger and more difficult for everyday Americans to pay.
Neither campaign has any plans to cover the new costs. Calculating their economic impacts, Trump’s plans would increase the deficit by $4 trillion compared to Harris’s $2 trillion, according to the Penn Wharton Budget Model. But Harris is not believed to be reviving the massive spending plan she promoted as one of the Senate’s most liberal members. His plans included a hugely expensive Medicare for All proposal, as well as $2,000-a-month stimulus checks for most Americans, costing $21 trillion. If you believe the Harris administration will not revive such proposals during the next economic crisis, you have not paid attention to recent Washington policymaking.
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While both campaigns suggest we can achieve lower prices and interest rates as well as more spending and debt, recent experience suggests otherwise. So where does the matter stop? That means who will ultimately pay the price for all this?
The reality is that every American will have to pay, especially those with modest incomes and younger Americans who will suffer longest from higher taxes, inflation and interest rates. We must demand more from our leaders than promises of big giveaways, followed by empty platitudes about rising debt and the financial pain that will inevitably result.
Matt Weidinger is a Rowe Fellow in Poverty Studies American Enterprise InstituteHe is a former deputy staff director of the House Committee on Ways and Means.
