As the economy shows signs of cooling, record debt is lurking in the background.
Yesterday, the Treasury Department released its monthly statement on receipts and outlays showing that the deficit for the first 10 months of fiscal year 2019 is 27 percent higher than last year and 70 percent higher than during Obama’s final full year in 2016. In total, outlays through July topped $3.73 trillion, nearly $300 billion more than at this time last year. Meanwhile, revenue for the first 10 months of this year topped $2.86 trillion, roughly $100 billion more than this time last year.
Despite the complaints that the tax cuts would drain the Treasury, revenue is up three percent, but because spending skyrocketed by over eight percent, the deficit now stands at $867 billion with two months left to the fiscal year, 26.7 percent higher than this time last year. That means that our government is on track to bring back the trillion-dollar annual deficits of Obama’s first term.
For those keeping track, inflation is only increasing about 1.6 percent annually, so that is quite a spending accomplishment by the government.
Much of the increase in revenue came from tariffs and increased payroll taxes. Payroll taxes indicate solid job growth, with more people working and paying payroll taxes. More than 70 percent of the increased revenue is from payroll taxes.
The biggest culprits for spending increases, as a percentage of last year’s tab, came from interest on the debt and Medicare. They increased 14.4 percent and 12.6 percent respectively. The Department of Health and Human Services (HHS) as a whole increased spending by over nine percent.
The lack of free market health care in this country and a government-created “private” monopoly have resulted in a death spiral of price inflation and increased government spending. It’s no mystery why our national expenditures on health care have popped from $27 billion in 1960 to over $3.3 trillion today. If health care had simply risen naturally at the same rate as the rest of the economy, without market interference, that number would be under $250 billion today. If we flushed $1.6 trillion down the toilet every year, we’d come out with a better result because we’d just waste money. Now, we are taking that wasted money and artificially inflating the cost of health care to the point that nobody can afford it without government continuing the death spiral of spending, monopolizing, and price inflation.
What are we left with at the end? Record interest payments on the debt to help service this health care monopoly, which constantly reinforces the cycle of debt. The national debt now stands at $22.3 trillion, roughly $2.4 trillion higher than when Trump took office and 8.3 trillion higher than when Republicans first won Congress in the year of the “Tea Party,” which itself was a blowback against what was thought of at the time as unprecedented debt.
All of this debt has been accrued before the implementation of the latest budget-busting deal. If nothing is done to change course, the budget caps will be busted by another $321 billion next year, and there is a two-year blank check for more debt.
Conservatives must remember that it’s not too late to fight back. Just because Republicans agreed to bust the budget caps, it doesn’t mean that they must bust them when they craft the funding bill in September. And if they plan to do so, conservatives should at least negotiate for more funding for border security and ICE detention space. After all, it would be a shame to mortgage the next generation for a future that doesn’t even belong to the citizens of this country.
Daniel Horowitz is a senior editor of Conservative Review. Follow him on Twitter @RMConservative.