America’s Insolvency is Mandatory

by | Dec 1, 2022

America’s Insolvency is Mandatory

by | Dec 1, 2022

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In October, the U.S. national debt reached $31 trillion, and the government is projected to wade another trillion dollars into the red in the 2023 fiscal year. The longer-term picture is even gloomier, with the deficit expected to double to $2 trillion by 2030.

Indeed, the longer the horizon, the worse things get. At 98% of Gross Domestic Product, the current national debt is the highest it’s been since just after World War II. On its current course, the debt will soar to 185% of the country’s entire economic output by 2052.

What’s particularly troubling is that the government’s 2022 $1.3 trillion-dollar deficit came at a time of near-record tax intake. At 19.8% of GDP, Uncle Sam’s 2022 tax haul was close to the all-time high of 20.5% set in 1944.

Washington doesn’t have a revenue problem—it has a spending problem.

What few people realize, however, is the extent to which the U.S. government’s disastrous trajectory is on autopilot, thanks to the fact that an ever-larger proportion of federal spending happens without Congressional action.

To understand why, it’s important to first understand that there are two main categories of government spending:

  • Discretionary spending, which requires a vote by Congress as part of the annual appropriations process.
  • Mandatory spending, which is dictated by previously-enacted laws and thus happens without an annual vote in Congress. Social Security, Medicare and Medicaid comprise a big majority of mandatory spending.

Here’s where things have taken an ominous turn. In 1965, mandatory spending accounted for 34% of all federal spending. Today, that share has more than doubled, with mandatory spending representing 71% of federal outlays. With overall spending higher too, mandatory spending is much larger slice of a larger pie.

Read the rest of this article at Stark Realities with Brian McGlinchey

About Stark Realities with Brian McGlinchey

STARK REALITIES WITH BRIAN McGLINCHEY is a Substack newsletter that undermines official narratives, demolishes conventional wisdom and exposes fundamental myths across the political spectrum. McGlinchey has spoken at the national conference of the Ron Paul Institute for Peace and Prosperity, and has appeared on the Scott Horton Show, Tom Woods Show and Ron Paul Liberty Report. Receive new Stark Realities posts via email

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