How fitting that the Congressional Budget Office released its long-term fiscal projections Wednesday, the same day that President Joe Biden began his economic rehabilitation tour.
In the words of The New York Times, Biden this week embarked upon “a concerted campaign … to claim credit for an economic revival in America.” In a Chicago speech, he touted his economic policies in an address that aides called “a cornerstone speech of his presidency.”
On the same day, however, the CBO issued a more sober view of the nation’s economic trajectory — a trajectory this administration has proudly accelerated.
“If current laws governing taxes and spending generally remained unchanged,” the analysis found, “the federal budget deficit would increase significantly in relation to gross domestic product (GDP) over the next 30 years.”
What does that mean? “Such high and rising debt would have significant economic and financial consequences,” the CBO concludes. “It would, among other things, slow economic growth, drive up interest payments to foreign holders of U.S. debt, elevate the risk of a fiscal crisis, increase the likelihood of other adverse effects that could occur more gradually, and make the nation’s fiscal position more vulnerable to an increase in interest rates. In addition, it could cause lawmakers to feel more constrained in their policy choices.”
Within six years, the CBO projects, the national debt as a share of GDP will surpass the previous record set during World War II. On our current course, the debt will exceed 180 percent of GDP in 2053. So much money will have to go to paying interest on the bill, that it will squeeze out virtually all other priorities. That, in turn, will inhibit private economic investment, creating further economic disruption.
None of this made it into Biden’s self-congratulatory speech.
To be sure, Republicans deserve plenty of blame for the national debt. But Biden has taken particular glee in his massive spending proposals while devoting precious little time to examining the long-term consequences.
It’s also worth noting that federal revenue in fiscal 2022 well exceeded average federal inlays over the previous 30 years. Yet the rate at which spending outpaces tax collections continues to climb. Washington has a spending problem which has metastasized to the point that our elected officials can no longer claim to be blind to its presence.
In Chicago, however, Biden made no mention of spending restraint or fiscal responsibility. To the contrary, he continued to champion billions in more taxpayer giveaways, such as student loan forgiveness, and to ignore the record-setting debt and inflation his policies unleashed. Is it any wonder that American voters take such a dim view of Bidenomics?
