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ICYMI: Unchecked Federal Spending Is Leading Us to Fiscal Calamity

Mar 6, 2019 by AFP

ARLINGTON, Va. – Russ Latino, the Vice President of Americans for Prosperity’s Economic Opportunity Portfolio, issued the following statement on reports that the federal deficit grew 77 percent in the first four months of fiscal year 2019 compared to last year during the same timeframe:

“Every American should be concerned about the risks of rising deficits, but make no mistake, our $22 trillion national debt is the result of overspending, not lack of revenue. We’ve long advocated pairing tax cuts with spending restraint, and we continue to urge Congress to work together to avert this looming fiscal crisis. Failing to take this threat seriously could have devastating and lasting consequences that will impact millions of lives. Both parties contributed to the problem and both parties are needed solve it.”

Read more about the dangers of unchecked federal spending from AFP Senior Policy Fellow Alison Acosta Winters in The Fiscal Times today.

Unchecked Federal Spending Is Leading Us to Fiscal Calamity

By: Alison Acosta Winters


The Congressional Budget Office recently released its annual budget forecast intended to guide Washington’s spending and tax decisions. …

The list of alarming statistics in CBO’s report is too long to recount them all, but consider these: Annual spending growing from $4 trillion to $7 trillion over the coming decade, and debt growing from $21 trillion to $31 trillion. …

Numbers this large are unrelatable for most people, but here’s a good way to illustrate the problem: Last year, for every household in America, the federal government collected $26,000 in taxes but spent $32,000, and added $6,000 to the credit card that already had a $168,000 balance.

According to the report, Social Security and Medicare alone are responsible for $12 trillion in new spending and about 85 percent of total new debt.

Why should you care? Several reasons. First, growing spending and debt mean slower economic growth. That may sound esoteric, but it boils down to fewer jobs, lower wage growth and higher costs to start a new business or expand an existing one. …

Second, this high debt makes it more likely that the country will experience a fiscal or financial crisis where a severe economic shock could rock the country. …

Lastly, this unhealthy fiscal outlook means that lawmakers have little room to deal with pressing priorities that could emerge, such as defending the country from foreign aggression. It will also crowd out constitutional government functions like law enforcement and the judiciary.

Won’t higher taxes solve the problem?  Not according to Brian Riedl of the Manhattan Institute. Riedl found the combined payroll tax you and your employer pay would need to more than double from 15.3 percent to 33.5 percent. This would only stabilize debt, not balance the budget.

We cannot grow or tax our way out of this problem. The only way to prevent the coming fiscal calamity is to reshape federal spending programs, including Social Security and Medicare, so they work better and are affordable for all Americans.

Washington has more than an opportunity to tackle this issue — it has an obligation. Will it deliver?

Click here to read the full op-ed.

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