{"id":1465178,"date":"2022-05-05T13:45:15","date_gmt":"2022-05-05T17:45:15","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1465178"},"modified":"2022-05-05T13:45:55","modified_gmt":"2022-05-05T17:45:55","slug":"federal-fiscal-shortfall-nears-1-million-per-household","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/federal-fiscal-shortfall-nears-1-million-per-household\/","title":{"rendered":"Federal Fiscal Shortfall Nears $1 Million Per Household"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">16<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Ffederal-fiscal-shortfall-nears-1-million-per-household%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1465178&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p><span>By James D. Agresti<\/span><br \/><span>May 5, 2022<\/span><\/p>\n<p><a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/05\/debt_mountain_flag.jpg\"><\/a><\/p>\n<p><strong>Overview<\/strong><\/p>\n<p>The U.S. Treasury has published a <a href=\"https:\/\/fiscal.treasury.gov\/files\/reports-statements\/financial-report\/2021\/fr-02-17-2022-(final).pdf\">major report<\/a> revealing that the federal government has amassed <a href=\"https:\/\/www.justfacts.com\/nationaldebt#quantifying_unfunded\">$124.1 trillion<\/a> in debts, liabilities, and unfunded obligations. To place this shortfall in perspective, it equates to:<\/p>\n<ul>\n<li>$955,407 for every household in the U.S.<\/li>\n<li>29 times annual federal revenues.<\/li>\n<li>86% of the combined net worth of all U.S. households and nonprofit organizations, including all assets in savings, real estate, corporate stocks, private businesses, and durable consumer goods like automobiles and furniture.<\/li>\n<\/ul>\n<p>The new data reflect the government\u2019s finances at the close of its 2021 fiscal year on <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/31\/1102\">September 30, 2021<\/a>. Unlike other estimates of the federal government\u2019s red ink which extend into the infinite future, the figure of $124.1 trillion only includes Americans who are alive right now. Thus, it measures the financial burden that today\u2019s Americans are placing on future generations.<\/p>\n<p>Officially called the \u201c<a href=\"https:\/\/fiscal.treasury.gov\/files\/reports-statements\/financial-report\/2021\/fr-02-17-2022-(final).pdf\">Financial Report of the United States Government<\/a>,\u201d this 258-page publication is mandated by a <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/31\/331\">federal law<\/a> which requires the Treasury and White House to produce a full accounting of the government\u2019s \u201coverall financial position\u201d each year. Beyond the <a href=\"https:\/\/www.justfacts.com\/nationaldebt#quantifying\">national debt<\/a>, this also includes the government\u2019s explicit and implicit commitments. This methodology approximates the <a href=\"https:\/\/www.justfacts.com\/nationaldebt#quantifying_unfunded\">accounting standards<\/a> that the federal government imposes on publicly traded corporations.<\/p>\n<p>Although the report discloses information of crucial import to the citizens of the United States, <a href=\"https:\/\/www.google.com\/search?q=%22Financial+Report+of+the+United+States+Government%22&#038;client=palemoon&#038;rls=Palemoon%3Aen-US&#038;biw=939&#038;bih=628&#038;source=lnt&#038;tbs=cdr%3A1%2Ccd_min%3A2%2F17%2F2022%2Ccd_max%3A5%2F4%2F2022&#038;tbm=nws\">Google News<\/a> indicates that no major media outlet has informed anyone about it since it was released on February 17, 2022.<\/p>\n<p><strong>A Comprehensive Accounting<\/strong><\/p>\n<p>As explained in the <a href=\"https:\/\/fiscal.treasury.gov\/files\/reports-statements\/financial-report\/2021\/fr-02-17-2022-(final).pdf#page=24\">report<\/a>, the federal government\u2019s budget is \u201cprepared primarily on a \u2018cash basis\u2019.\u201d This is an incomplete measure of its finances because <a href=\"https:\/\/web.archive.org\/web\/20200226065916\/http:\/www.businessdictionary.com\/definition\/cash-basis-accounting.html\">cash accounting<\/a> is the simplistic process of counting money as it flows in or out. For example, cash accounting ignores the pension benefits promised to federal workers until these benefits are actually paid, which is often years or decades after they are promised.<\/p>\n<p>In contrast to cash accounting, this Treasury report uses <a href=\"http:\/\/www.merriam-webster.com\/dictionary\/accrual\">accrual accounting<\/a>, which measures financial commitments as they are made. The U.S. Government Accountability Office, the official watchdog of Congress, <a href=\"http:\/\/www.gao.gov\/new.items\/d05958sp.pdf#page=9\">explains<\/a> that the report uses accrual accounting \u201cto provide a complete picture of the federal government\u2019s financial operations and financial position.\u201d<\/p>\n<p>The federal government <a href=\"http:\/\/www.justfacts.com\/document\/enron_laws_collapse.pdf\">requires<\/a> large corporations <a href=\"https:\/\/web.archive.org\/web\/20210304145939\/http:\/\/www.fasb.org\/st\/summary\/stsum87.shtml\">to use<\/a> accrual accounting for their pension plans because this is the \u201cmost relevant and reliable\u201d way to measure their financial health. The same applies to other retirement benefits like healthcare. The <a href=\"https:\/\/bit.ly\/3ve5nQI\">official statement<\/a> of this rule explains that \u201ca failure to accrue\u201d implies \u201cthat no obligation exists prior to the payment of benefits.\u201d Since an obligation does exist, failing to account for it \u201cimpairs the usefulness and integrity\u201d of financial statements.<\/p>\n<p>Nevertheless, the media and politicians <a href=\"https:\/\/www.google.com\/search?q=%22federal+budget%22&#038;num=100&#038;lr=&#038;hl=en&#038;biw=1024&#038;bih=686&#038;source=lnt&#038;tbs=cdr%3A1%2Ccd_min%3A2%2F27%2F2020%2Ccd_max%3A3%2F19%2F2020&#038;tbm=nws\">routinely cite<\/a> the federal budget and national debt, while <a href=\"https:\/\/www.google.com\/search?q=%22Financial+Report+of+the+United+States+Government%22&#038;client=palemoon&#038;rls=Palemoon%3Aen-US&#038;biw=939&#038;bih=628&#038;source=lnt&#038;tbs=cdr%3A1%2Ccd_min%3A2%2F17%2F2022%2Ccd_max%3A5%2F4%2F2022&#038;tbm=nws\">ignoring<\/a> the far more comprehensive and bleaker data from this Treasury report.<\/p>\n<p><strong>Federal Employee Retirement Benefits<\/strong><\/p>\n<p>The differences between the federal budget and the broader Treasury data have major consequences for future taxpayers, partly because pension and other retirement benefits are a large part of the compensation packages for government employees. When these benefits are included, civilian non-postal federal employees receive an average of 17% more <a href=\"https:\/\/www.justfacts.com\/income_wealth_poverty#compensation_government\">total compensation<\/a> than private-sector workers with comparable education and work experience. Postal workers receive even greater premiums ranging from <a href=\"https:\/\/www.justfacts.com\/unions.asp#economic-taxpayers\">25% to 43%.<\/a><\/p>\n<p>In 2020, federal, state, and local governments spent $2.13 trillion on <a href=\"https:\/\/www.justfacts.com\/income_wealth_poverty#compensation_government\">employee compensation<\/a>, which amounts to an average cost of $16,556 for every household in the United States.<\/p>\n<p>The Treasury report shows that the federal government currently owes <a href=\"https:\/\/fiscal.treasury.gov\/files\/reports-statements\/financial-report\/2021\/fr-02-17-2022-(final).pdf#page=72https:\/\/www.fiscal.treasury.gov\/files\/reports-statements\/financial-report\/2019\/FR-02272020%28Final%29.pdf\">$10.2 trillion<\/a> in pensions and other benefits to federal employees and veterans. To pay the present value of these benefits will require an average of $78,372 from <a href=\"https:\/\/www2.census.gov\/programs-surveys\/demo\/tables\/families\/2021\/cps-2021\/tabavg1.xls\">every household<\/a> in the United States.<\/p>\n<p><strong>Social Security &#038; Medicare<\/strong><\/p>\n<p>A similar situation exists with <a href=\"https:\/\/www.justfacts.com\/socialspending#programs_insurance\">social insurance programs<\/a> like Social Security and Medicare because, contrary to <a href=\"https:\/\/www.justfacts.com\/socialsecurity#popular-mine\">popular belief<\/a>, these programs don\u2019t save workers\u2019 tax payments for their retirements. Instead, they <a href=\"https:\/\/www.justfacts.com\/socialsecurity#popular-mine\">immediately spend<\/a> the vast majority of those taxes to pay benefits to current recipients. Thus, they are <a href=\"https:\/\/www.nasi.org\/learn\/socialsecurity\/overview\">called<\/a> \u201cpay-as-you-go\u201d programs.<\/p>\n<p>In stark contrast, the <a href=\"https:\/\/apps.bea.gov\/scb\/pdf\/2009\/08%20August\/0806_benefits.pdf\">U.S. Bureau of Economic Analysis<\/a> states that \u201cfederal law requires that private pension plans operate as funded plans, not as pay-as-you-go plans.\u201d The reasons for this, as <a href=\"http:\/\/www.actuary.org\/pdf\/pension\/fundamentals_0704.pdf\">explained<\/a> by the American Academy of Actuaries, are to increase \u201cbenefit security\u201d and ensure \u201cintergenerational equity.\u201d <a href=\"https:\/\/www.justfacts.com\/socialsecurity#taxes-payroll\">Social Security<\/a> and <a href=\"https:\/\/www.justfacts.com\/healthcare#medicare_taxes\">Medicare<\/a>, on the other hand, have levied increasing tax burdens on succeeding generations of Americans and have accumulated trillions of dollars in unfunded obligations.<\/p>\n<p>Federal actuaries measure the unfunded obligations of Social Security and Medicare in several <a href=\"http:\/\/www.justfacts.com\/socialsecurity#financial\">different ways<\/a>, but only one of them approximates accrual accounting. This is called the \u201cclosed-group\u201d unfunded obligation, which is the money needed to cover the shortfalls for all current taxpayers and beneficiaries in these programs.<\/p>\n<p>In the <a href=\"https:\/\/books.google.com\/books?id=rSKOSQxltXoC&#038;pg=PA207&#038;lpg=PA207&#038;dq=accrual+%22closed+group%22&#038;source=bl&#038;ots=KTmqVD3TIs&#038;sig=YiSrg2kRzVzVO0sg52qyz5VXBZw&#038;hl=en&#038;sa=X&#038;ei=pNErVbqaFuTIsQS-kILgDg&#038;ved=0CEQQ6AEwCQ#v=onepage&#038;q=accrual%20%22closed%20group%22&#038;f=false\">words of<\/a> Harvard Law School professor and federal budget specialist <a href=\"https:\/\/hls.harvard.edu\/faculty\/directory\/10423\/Jackson\">Howell E. Jackson<\/a>, the closed-group measure \u201creflects the financial burden or liability being passed on to future generations.\u201d These <a href=\"https:\/\/www.justfacts.com\/nationaldebt#quantifying_unfunded\">burdens<\/a> are $43.2 trillion for Social Security and $47.8 trillion for Medicare. To place these figures in context:<\/p>\n<ul>\n<li>Social Security\u2019s unfunded obligations <a href=\"https:\/\/www.justfacts.com\/socialsecurity#financial\">amount to<\/a> an additional $247,327 from every person who currently pays Social Security payroll taxes.<\/li>\n<li>Medicare\u2019s unfunded obligations <a href=\"https:\/\/www.justfacts.com\/healthcare#medicare_financial\">amount to<\/a> an additional $183,614 from every U.S. resident aged 16 or older.<\/li>\n<\/ul>\n<p>Those shortfalls are what remain after the federal government has <a href=\"https:\/\/www.justfacts.com\/socialsecurity#impact_interest\">paid back with interest<\/a> all of the money it has borrowed from Social Security and Medicare. This debunks the <a href=\"https:\/\/www.justfacts.com\/socialsecurity#popular-looting\">common myth<\/a> that Social Security\u2019s financial problems are caused by the federal government looting it to pay for other programs. Just the opposite, the federal government has repeatedly <a href=\"https:\/\/www.justfactsdaily.com\/social-security-has-been-boosted-not-looted\/\">boosted<\/a> Social Security by raising its <a href=\"https:\/\/www.justfacts.com\/socialsecurity#taxes-payroll\">payroll tax rate<\/a>, increasing its inflation-adjusted <a href=\"https:\/\/www.justfacts.com\/socialsecurity#taxes-taxable\">taxable maximum<\/a>, and injecting <a href=\"https:\/\/www.justfacts.com\/socialsecurity#benefits-taxes\">other taxes<\/a> to its income stream.<\/p>\n<p>Yet, the program is still facing insolvency, <a href=\"http:\/\/www.justfacts.com\/socialsecurity#financial-causes\">mainly because<\/a> the ratio of workers paying taxes to people receiving benefits has fallen by 47% since 1960 and is projected to fall further.<\/p>\n<p>Social Security and Medicare differ from true pensions because taxpayers don\u2019t have a <a href=\"http:\/\/www.justfacts.com\/socialsecurity#personal\">contractual right<\/a> to receive these benefits. Nevertheless, paying these benefits is an implied commitment of the federal government, and <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/31\/331\">federal law<\/a> requires that these programs be included in the Treasury report.<\/p>\n<p><strong>Other Obligations<\/strong><\/p>\n<p>Beyond the national debt, federal employee retirement benefits, and Social Security and Medicare shortfalls\u2014the Treasury details other obligations of the federal government. These, include, <a href=\"https:\/\/fiscal.treasury.gov\/files\/reports-statements\/financial-report\/2021\/fr-02-17-2022-(final).pdf#page=72https:\/\/www.fiscal.treasury.gov\/files\/reports-statements\/financial-report\/2019\/FR-02272020%28Final%29.pdf\">for example<\/a>:<\/p>\n<ul>\n<li>$123 billion in accounts payable.<\/li>\n<li>$613 billion in environmental and disposal liabilities.<\/li>\n<li>$231 billion in loan guarantee program liabilities.<\/li>\n<\/ul>\n<p><strong>Federal Assets<\/strong><\/p>\n<p>The Treasury report also measures the federal government\u2019s <a href=\"https:\/\/fiscal.treasury.gov\/files\/reports-statements\/financial-report\/2021\/fr-02-17-2022-(final).pdf#page=72https:\/\/www.fiscal.treasury.gov\/files\/reports-statements\/financial-report\/2019\/FR-02272020%28Final%29.pdf\">commercial assets<\/a>, such as:<\/p>\n<ul>\n<li>$475 billion in cash and other monetary assets.<\/li>\n<li>$1.2 trillion in property, plants, and equipment.<\/li>\n<li>$1.7 trillion in receivable loans, mainly comprised of <a href=\"https:\/\/fiscal.treasury.gov\/files\/reports-statements\/financial-report\/2021\/fr-02-17-2022-(final).pdf#page=14\">student loans<\/a>.<\/li>\n<\/ul>\n<p>The report, however, doesn\u2019t account for federal stewardship land and heritage assets, such as national parks and the original copy of the Declaration of Independence. While these items have tangible value, the <a href=\"https:\/\/fiscal.treasury.gov\/files\/reports-statements\/financial-report\/2021\/fr-02-17-2022-(final).pdf#page=83\">report<\/a> explains that they \u201care intended to be preserved as national treasures,\u201d not sold to the highest bidder to cover debts.<\/p>\n<p>In total, the government owned <a href=\"https:\/\/fiscal.treasury.gov\/files\/reports-statements\/financial-report\/2021\/fr-02-17-2022-(final).pdf#page=72https:\/\/www.fiscal.treasury.gov\/files\/reports-statements\/financial-report\/2019\/FR-02272020%28Final%29.pdf\">$4.9 trillion<\/a> in commercial assets at the close of its 2021 fiscal year.<\/p>\n<p><strong>The Grand Total<\/strong><\/p>\n<p>Adding up the federal government\u2019s debts, liabilities, and unfunded obligations and then subtracting the value of its commercial assets yields a <a href=\"https:\/\/www.justfacts.com\/nationaldebt#quantifying_unfunded\">fiscal shortfall<\/a> of $124.1 trillion.<\/p>\n<p>Moreover, the actual figure may be significantly worse because the Treasury\u2019s data is based on federal agency assumptions that are optimistic in these respects:<\/p>\n<ul>\n<li>A 2012 paper in the journal <em>Demography<\/em> <a href=\"http:\/\/gking.harvard.edu\/publications\/statistical-security-social-security\">found<\/a> that the Social Security Administration is using an antiquated method to project life expectancies, and as a result, the program \u201cmay be in a considerably more precarious position than officially thought.\u201d<\/li>\n<\/ul>\n<ul>\n<li>When the federal government makes <a href=\"http:\/\/www.justfacts.com\/education#higher_spend_loans\">student loans<\/a>, it projects that it will eventually reap a <a href=\"http:\/\/www.justfacts.com\/education#higher_spend_loan_fed\">9% average profit<\/a> from interest on the loans. However, the Congressional Budget Office (CBO) <a href=\"https:\/\/www.cbo.gov\/sites\/default\/files\/cbofiles\/attachments\/03-05-FairValue_Brief.pdf\">has determined<\/a> that if the federal government accounted for the market risk of these loans, it would show an average loss of 12% on every dollar it lends. If President Biden forgives more student loans, as <a href=\"https:\/\/www.whitehouse.gov\/briefing-room\/speeches-remarks\/2022\/04\/28\/remarks-by-president-biden-on-the-request-to-congress-for-additional-funding-to-support-ukraine\/\">he is saying<\/a> he may do, this would further increase the fiscal burden on future generations.<\/li>\n<\/ul>\n<ul>\n<li>The Board of Medicare Trustees <a href=\"http:\/\/www.cms.gov\/Research-Statistics-Data-and-Systems\/Statistics-Trends-and-Reports\/ReportsTrustFunds\/downloads\/tr2014.pdf#page=282\">has stated<\/a> that the program\u2019s long-term costs may be \u201csubstantially higher\u201d than projected under current law. This is because the <a href=\"http:\/\/www.justfacts.com\/healthcare#politics-2010\">price controls<\/a> in Obamacare will cut Medicare prices for many medical services over the next three generations to \u201cless than half of their level under the prior law.\u201d The actuaries have <u><a href=\"http:\/\/www.cms.gov\/Research-Statistics-Data-and-Systems\/Statistics-Trends-and-Reports\/ReportsTrustFunds\/downloads\/tr2014.pdf#page=283\">been clear<\/a><\/u>\u00a0that this will likely cause \u201cwithdrawal of providers from the Medicare market\u201d and \u201csevere problems with beneficiary access to care.\u201d<\/li>\n<\/ul>\n<p><strong>The Future is Here<\/strong><\/p>\n<p>In 2013, CBO ran a <a href=\"https:\/\/www.cbo.gov\/sites\/default\/files\/recurringdata\/51119-2013-09-longtermbudgetprojections.xlsx\">long-term projection<\/a> of the publicly held debt, a <a href=\"http:\/\/www.justfacts.com\/nationaldebt#government\">partial measure<\/a> of the national debt often cited by federal agencies and media outlets. This projection was unique in that it estimated what would occur under current federal policies and their economic effects, as opposed to other CBO projections that use <a href=\"https:\/\/www.justfactsdaily.com\/krugman-and-obama-mislead-on-debts-and-deficits\">unrealistic assumptions<\/a> and budget gimmicks.<\/p>\n<p>CBO\u2019s 2013 projection estimated that the debt would grow over the next two decades to unprecedented levels unless the government changed course. Nine years later, the <a href=\"https:\/\/www.justfacts.com\/nationaldebt#politics-current\">actual outcomes<\/a> have been far worse, mainly due to more than $5 trillion in spending on \u201c<a href=\"https:\/\/www.justfacts.com\/socialspending#overview\">Covid relief<\/a>\u201d laws:<\/p>\n<p><a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/05\/publicly_held_debt_projections_outcomes.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-10359\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/05\/publicly_held_debt_projections_outcomes.png\" alt=\"\" width=\"976\" height=\"708\" srcset=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/05\/publicly_held_debt_projections_outcomes.png 976w, https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/05\/publicly_held_debt_projections_outcomes-300x218-1.png 300w, https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/05\/publicly_held_debt_projections_outcomes-768x557-1.png 768w, https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/05\/publicly_held_debt_projections_outcomes-640x464-1.png 640w\" \/><\/a><\/p>\n<p><strong>Drivers<\/strong><\/p>\n<p>Contrary to the <a href=\"https:\/\/www.justfacts.com\/news_2019_survey_voter_knowledge\">media narrative<\/a> that <a href=\"https:\/\/www.justfacts.com\/nationaldebt#media-tax\">tax cuts<\/a> and <a href=\"https:\/\/www.justfacts.com\/government_spending#functions_federal\">military spending<\/a> are to blame for the runaway national debt, the primary cause is greater spending on <a href=\"http:\/\/www.justfacts.com\/socialspending.asp\">social programs<\/a> which provide healthcare, income security, education, nutrition, housing, and cultural services. <a href=\"http:\/\/www.justfacts.com\/nationaldebt#causes-spending\">These programs<\/a> have grown from 21% of all federal spending in 1960 to 73% in 2020:<\/p>\n<p><a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/05\/expenditures_function.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-10360\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/05\/expenditures_function.png\" alt=\"\" width=\"981\" height=\"712\" srcset=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/05\/expenditures_function.png 981w, https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/05\/expenditures_function-300x218-1.png 300w, https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/05\/expenditures_function-768x557-1.png 768w, https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/05\/expenditures_function-640x465-1.png 640w\" \/><\/a><\/p>\n<p>Under current laws and policies, CBO <a href=\"https:\/\/www.cbo.gov\/publication\/57038\">projects<\/a> that almost all future growth in spending will be due to social programs and <a href=\"https:\/\/www.justfacts.com\/nationaldebt#interest\">interest<\/a> on the national debt.<\/p>\n<p><strong>Harmful Effects<\/strong><\/p>\n<p>A <a href=\"http:\/\/www.justfacts.com\/nationaldebt#consequences\">broad range<\/a> of academic publications explain that excessive government debt can cause far-reaching negative outcomes, such as lower wages, increased inflation, weak economic growth, higher taxes, reduced government benefits, or combinations of such results.<\/p>\n<p>Likewise, the <a href=\"http:\/\/www.gao.gov\/assets\/250\/243712.pdf\">U.S. Government Accountability Office<\/a> warns that \u201cthe costs of federal borrowing will be borne by tomorrow\u2019s workers and taxpayers,\u201d which \u201cmay reduce or slow the growth of the living standards of future generations.\u201d<\/p>\n<p>Such effects may have already begun. Although <a href=\"http:\/\/www.justfacts.com\/immigration.asp#association_causation\">association does not prove causation<\/a>, the national debt has <a href=\"http:\/\/www.justfacts.com\/nationaldebt#quantifying\">risen dramatically<\/a> over past decades, and with this, the U.S. has experienced episodes of historically poor growth in <a href=\"https:\/\/www.justfactsdaily.com\/luckiest-generation\/\">gross domestic product<\/a>, <a href=\"https:\/\/www.justfacts.com\/income_wealth_poverty.asp#productivity\">productivity<\/a>, and <a href=\"https:\/\/www.justfactsdaily.com\/factual-obamas-presidency\/\">household income<\/a>. Along with this, <a href=\"https:\/\/fred.stlouisfed.org\/series\/CPIAUCSL\">rapid inflation<\/a> has set in, another common <a href=\"https:\/\/www.justfacts.com\/nationaldebt#consequences\">consequence<\/a> of excessive government debt.<\/p>\n<p>While some believe the U.S. government can spend and borrow <a href=\"https:\/\/www.justfacts.com\/nationaldebt#politics-current-ww2_claims\">with abandon<\/a> because it can <a href=\"https:\/\/www.justfacts.com\/monetarypolicy#quantitative\">print money<\/a>, one of the most established laws of economics is that there is no such thing as a free lunch. The <a href=\"https:\/\/www.amazon.com\/William%20A.%20McEachern\/e\/B001I9OWB0\/ref=la_B001I9OWB0_pg_2\/136-2237037-2270224?rh=n%3A283155%2Cp_82%3AB001I9OWB0&#038;page=2&#038;sort=author-pages-popularity-rank&#038;ie=UTF8&#038;qid=1505400779\">prolific economist<\/a> William A. McEachern <a href=\"https:\/\/www.amazon.com\/Economics-Contemporary-Introduction-William-McEachern\/dp\/1133188125\">explains<\/a> why this is so:<\/p>\n<blockquote>\n<p>There is no free lunch because all goods and services involve a cost to someone. The lunch may seem free to you, but it draws scarce resources away from the production of other goods and services, and whoever provides a free lunch often expects something in return. A Russian proverb makes a similar point but with a bit more bite: \u201cThe only place you find free cheese is in a mousetrap.\u201d<\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>By James D. AgrestiMay 5, 2022 Overview The U.S. Treasury has published a major report revealing that the federal government has amassed $124.1 trillion in debts, liabilities, and unfunded<\/p>\n","protected":false},"author":498,"featured_media":2315279,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1465178","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1465178","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/498"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1465178"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1465178\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1465178"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1465178"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1465178"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}