Just before Memorial Day, the
Administration released its long awaited fiscal year 2022 budget proposal. Having
reviewed the proposal, it’s obvious why they chose that timing. They hoped most
Americans would be too distracted by backyard barbecues and tributes to fallen heroes
to notice.
I have bad news for my Democrat
colleagues. The American public won’t have the wool pulled over their eyes that
easily. Americans will see this budget for what it is: an unserious political
document containing a laundry list of liberal wish list policies unmoored from
economic or fiscal reality.
It would be funny if not for the very
serious issues we currently face as a country.
In response to the pandemic, Congress understandably
took bold actions to help individuals keep a roof over their head and small business
keep their lights on. As a result, our national debt exploded. It now exceeds
the entire output of our economy.
As we enter as post-pandemic world, we need
to address the very real issues rising debt and deficits pose for our country over
the long-term. Otherwise, to quote the non-partisan Congressional Budget
Office, “a growing debt burden could increase the risk of a fiscal crisis and
higher inflation as well as undermine confidence in the U.S. dollar.”
The President’s budget completely ignores
potential fiscal and economic challenges on the horizon. Taking the concept of
“never letting a crisis go to waste” to a whole new level, his budget would put
our country in permanent crisis mode in terms of spending and debt levels.
In 2009, at the height of the financial
crisis, government spending peaked at 24.4 percent of GDP. Spending proposed
under the President’s budget would average 24.5 percent over the next decade.
Moreover, his budget would set a new
record for debt as a share of the economy. According to the President’s own
rosy assumptions, debt as percent of GDP would reach 112 percent in 2022; shattering
the WWII record of 106 percent. By 2031, debt as a share of our economy would hit
117 percent.
At a time when inflation has been rearing
its head, proposing sustained spending and debt at these levels is playing with
fire. Even long-time Democrat economists and Obama administration alums, Larry
Summers and Jason Furman, have begun to sound the inflation alarm. The
President would be well advised to start taking notice.
As problematic as the spending side of the
President’s budget is, the tax side is equally dangerous. The President
proposes enacting the largest tax increase in history.
Incredibly, even with the $3.6 trillion in
new taxes he proposes his budget still doesn’t come close to putting our
national debt on a sustainable path given the new spending.
This shows his tax hikes aren’t about fiscal
responsibility. Instead, they are about punishing success and redistributing
wealth.
Ultimately, this will prove disastrous for
the economy and all Americans. Job killing tax hikes will slow economic growth,
reduce business investment and result in lower wages and fewer jobs over the
long-run. As a result, the middle-class is likely to suffer the most.
Higher taxes, excessive spending, and
escalating debt are not a recipe for our economy to “Build Back Better.” They’re just a recipe for the government to
“Build Bureaucracy Bigger” at the expense of hard working Americans.
