The United States is facing an unprecedented fiscal crisis, with its budget deficit soaring past $2 trillion in the past 12 months. Despite record-low unemployment rates, the deficit is equivalent to 7.2% of GDP and has not dipped below 3% since 2015. This trend is projected to continue, with the national debt expected to surpass 100% of GDP next year, a nearly 40% increase over a decade.
The rising deficit can be attributed to various factors, including military spending, the aftermath of the 2008 financial crisis, the ongoing pandemic, unfunded tax cuts, and stimulus programs. Both political parties claim to prioritize fiscal responsibility but have a history of increasing spending and cutting taxes while in power.
The next president must make a significant economic decision regarding President Trump’s tax cuts from 2017. Renewing these cuts generously would only worsen America’s already precarious fiscal situation. With interest rates no longer at near-zero levels, more money is being spent on servicing government debt than on essential areas such as national defense. It is clear that a change in approach is necessary to address America’s growing budget deficit and mounting national debt.
In conclusion, America’s budget has become an exercise in vice, with the federal government spending $2 trillion more than it has raised in taxes over the past 12 months. This massive deficit has occurred despite record-low unemployment rates and needs immediate attention from policymakers to prevent further economic instability.
