Unconstitutional \u2018Loan\u2063 Forgiveness\u2019<\/strong><\/h2>\nMany headlines reported<\/a> that the federal government ran only a $1.7 trillion deficit last fiscal year. But the effective \u2063deficit was higher, and using a smaller number in headlines obscures the reality of our deficit problem.<\/p>\n
The accounting issue behind the discrepancy \u200dinvolves the government giveaway in the form of student \u201c loan forgiveness<\/a>,\u201d which President Biden proposed last year. In June, the Supreme Court struck down\u200c this\u2063 program\u200b as\u2062 unconstitutional. However, \u2064the federal government recorded \u201csavings\u201d on its books of $321 billion\u2063 because the Biden administration could not spend this money on their giveaway.<\/p>\n
From an accounting standpoint<\/a>, Washington ran a roughly $1.4 trillion deficit in 2022 and a $1.7 \u200ctrillion deficit this year. But if you\u200d consider the\u2063 $321 billion it \u201cspent\u201d when the Biden administration first announced its \u201cforgiveness\u201d plan in 2022 and \u2063the\u200b $321 billion \u200cit \u201csaved\u201d when the Supreme Court struck that plan down, the\u200b federal government\u200d actually ran a deficit of $1 trillion in 2022 which jumped to $2 trillion in fiscal \u20632023. <\/p>\n
Removing \u200dthe accounting adjustments for a plan that (thankfully) never \u2062went \u200binto effect reveals just how much\u2063 the deficit has rebounded under Joe Biden\u2019s watch.<\/p>\n
<\/div>\n
Inflation Means Higher Spending<\/strong><\/h2>\nThe \u2064Department of the Treasury\u2019s press release<\/a> regarding the budget\u2062 numbers attempted to \u2063highlight that revenue declined between 2022 and 2023.\u2064 The Biden administration views this \u2062decline as a sign for Congress to raise more taxes<\/a> to lower the deficit.<\/p>\n
But the massive revenue spike in 2022 was in \u200cmany ways a one-off\u2062 sparked by\u200c monetary conditions.\u2063 The Federal Reserve\u2019s policy of printing money<\/a> throughout the Covid pandemic created bubbles in all sorts of asset classes, \u200bfrom the\u200b stock market to cryptocurrencies \u200band much more. \u200cWhen people sold their\u2063 (artificially inflated) assets, \u2062they incurred capital \u200cgains \u2063taxes, which provided a temporary boon to the Treasury.<\/p>\n
But this boon came with a downside as Federal Reserve money-printing and congressional over-spending stoked inflation<\/a>, causing federal \u200dspending to rise and exacerbate our deficit problems.<\/p>\n
The Treasury admits \u200dthat, excluding the student \u201cloan forgiveness<\/a>\u201d issue discussed above, non-interest outlays rose<\/a> from 21.4 percent of the economy in fiscal year 2022\u2064 to 21.6 percent\u2063 of GDP in fiscal 2023.\u2064 That increase came in large \u2062part because higher inflation led \u200bto \u2064 more spending on inflation-indexed \u2063programs<\/a>,\u200d such as a higher cost-of-living adjustment for Social Security recipients.<\/p>\n
<\/div>\n
Fiscal Danger Ahead<\/strong><\/h2>\nInflation-increased spending portends major fiscal problems ahead. The \u2064Treasury report<\/a> claimed that the \u2062deficit increased from 5.4 percent of \u2063the economy\u2019s GDP in 2022 to 6.3 percent\u200d of GDP in 2023. But because the latter number includes the phony savings from the striking down of\u200d \u201cloan forgiveness,\u201d\u2063 it understates \u200cthe depth of our deficit problem.<\/p>\n
For the federal government to run a deficit approaching 7 percent of its\u200d economy during a time of relative economic growth demonstrates \u2062a \u200ddangerous level of fiscal recklessness. <\/p>\n
Ironically, one of \u2062the other big sources of increased spending came\u2064 from higher interest payments,\u2062 reflecting both higher federal debt levels overall and the higher interest rates the Treasury is having to pay to those who own federal debt.<\/p>\n
Washington is rapidly approaching\u2064 the point<\/a> at which interest costs will become\u2062 one of the largest elements of the federal budget. Such a scenario amounts to generational theft \u2014 the tax dollars \u200cof young Americans\u2064 being\u2063 used for little else than to pay the bills their parents and grandparents incurred. <\/p>\n
Frittering away the nation\u2019s future is the worst kind of \u201cgift\u201d Americans can give their descendants.\u200c Yet without significant reform \u2014 and soon \u2014 the next generation will \u200dalmost certainly face a financial future bleaker than that\u200c of their parents.<\/p>\n
<\/div>\n
\t\t\t\t\t \t\t\t\t\t\t\t\t\t<\/div>\n
rnrn <\/p>\n
The \u2063Treasury reported that in fiscal year 2023, the federal government spent \u2062$5.34 trillion, an increase of 51% compared to the previous year. This surge in spending was largely driven by the rising costs of goods and services due to inflation. With the danger of rising \u200dfederal deficits in good economic times, how does inflation impact the federal deficit and the overall fiscal health of the nation?<\/h2>\n
Title: The Danger of Rising Federal Deficits in Good Economic Times<\/p>\n
Introduction:<\/p>\n
In \u2063the 12 fiscal months \u2062that ended on September 30, the\u2064 federal deficit effectively doubled compared to 2022. This increase in deficits during comparatively good economic times highlights both the\u2062 structural \u2064problems driving these deficits and the\u2063 potential danger they pose to our nation’s fiscal future. Despite\u2063 the notion of Washington having any sense of fiscal discipline, the facts surrounding the recently concluded fiscal year dispel this belief.<\/p>\n
Unconstitutional\u200c ‘Loan Forgiveness’:<\/p>\n
Many headlines reported that the federal government ran only a\u2064 $1.7 trillion deficit last fiscal\u2064 year. However, the effective\u200c deficit was higher,\u2064 and using a smaller number\u200b in headlines obscures the reality of our deficit problem. The discrepancy in accounting arises from the\u2063 government’s \u200bgiveaway in the form of student “loan forgiveness,” which President Biden proposed last year. \u200cIn June,\u200d the Supreme Court\u2062 deemed this program \u200cas unconstitutional. Nonetheless, the federal\u2062 government recorded \u200d”savings” of $321 billion, as the Biden\u200b administration was\u200d unable to spend this money on the giveaway. Taking this into account, the federal government actually ran a deficit of $1 trillion in 2022, which jumped to $2 trillion in fiscal \u200cyear \u20632023 when considering the adjustments for\u200c the forgiveness plan.<\/p>\n
Inflation Means Higher Spending:<\/p>\n
The \u200dDepartment of<\/p>\n","protected":false},"excerpt":{"rendered":"
In the 12 months ending on Sept. 30, the federal deficit doubled from 2022. This highlights the structural issues causing the deficits and the risk they pose to our nation’s fiscal future, as Washington continues to accumulate high deficits even during relatively favorable economic conditions.<\/p>\n","protected":false},"author":521,"featured_media":2079821,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[546],"tags":[],"class_list":["post-2079820","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-federalist"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2079820","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\/521"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2079820"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2079820\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2079821"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2079820"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2079820"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2079820"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}