America's fiscal crisis isn't just national debt. Household debt reached a new high of $17.5 trillion
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America is facing new, coinciding fiscal pandemics – where household debt and government debt are on unsustainable trajectories at the same time. The symptoms are evident, most prominently in the form of a stubborn disconnect between the state of the economy and the sentiments of the public. Despite some seemingly positive economic indicators of GDP and job growth, many Americans are gripped by anxiety, feeling as though their financial security is on shaky ground.
Clearly, the almost 18% increase in prices since President Joe Biden took office – caused by Democratic overspending in Washington – has fueled inflationary pain.
But there is more. Fear about a swift and sharp financial downturn – in spite of some currently good economic statistics – is another symptom of the dueling financial pandemics. And this fever is fired by worry that both the federal government and their own households are borrowing too much money.
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So the root of this fiscal malaise lies in the impact of both personal spending and government accountability. The New York Fed recently announced that total household debt reached a new all-time high of $17.5 trillion in the fourth quarter of 2023. With goods and services costing more across the board, household debt has soared to unprecedented levels.
Bidenomics is a huge part of America's debt problem. (Photo by Scott Olson/Getty Images)
Credit card balances alone have increased by $359 billion under Biden. This provisional prosperity is akin to building castles on sand – unsustainable and fraught with risk. It is the bane – and pain – of Bidenomics.
Living beyond your means through piling up excessive indebtedness builds a personal wall of worry. It forces you to begin making unthinkable choices about what you can afford week to week, and whether you will ever be able to save and plan for the future.
More and more, Americans are living on borrowed time and money – and so is their government.
On February 14, Director of the Congressional Budget Office Dr. Phil Swagel testified before the House Budget Committee and reviewed the latest Budget and Economic Outlook. The report clearly highlights our unsustainable fiscal path, particularly when it comes to federal debt and deficits.
The 2024 budget deficit is projected at $1.6 trillion and thereafter steadily mounts, reaching a whopping $2.6 trillion by 2034. Just the cost of paying the interest on the debt will exceed defense and Medicare spending this year. CBO notes that our annual deficits will produce the highest levels of debt relative to the size of the economy ever recorded in American history.
Americans are looking for several ways to assuage this fiscal debacle.
First, they want the truth. Leaders need to listen and acknowledge these long-term problems that could quickly lead to an economic death spiral if left unaddressed. We need to level with the people we serve.
Second, they want a plan. We need to put forward ideas and solutions to get our balance sheet back on track.
Congressional Budget Office Director Phillip Swagel testified recently in front of Congress about America's debt crisis. (Photo by Alex Wong/Getty Images)
Finally, they want political courage. Entrenched dysfunction has blocked any reasonable path to tackle these challenges – it has been more than two decades since Congress has passed all 12 individual appropriations bills on time. That needs to change.
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Biden’s FY2025 budget in March will do none of the above. By every indication, we can expect more of the same – catastrophic levels of taxes, spending and borrowing. In a moment that calls for being bold, it stands to set a new low for fiscal cowardice.
In stark contrast, House Republicans on the Budget Committee stepped up last year and advanced our 10-year, balanced budget framework. It is a pro-growth blueprint designed to address these fiscal pandemics and we plan to advance a similar plan in the coming weeks.
More and more, Americans are living on borrowed time and money – and so is their government.
Our framework will focus on advancing policies that reduce Washington’s debt burden by ending the Biden spending spree, right-sizing the bloated bureaucracy, and reining in runaway automatic spending once and for all. We will root out waste and fraud in entitlement programs, so benefits reach the most vulnerable and needy.
To help families, we will lock in the pro-growth Trump tax cuts to unlock opportunities for all. Our plan will put patients in charge of healthcare, restore American energy dominance and restore the dignity of work.
As James Madison once warned, "A public debt is a public curse." It’s time for both the individual and the federal government to break free from the curse of overspending and live within their means. By implementing smart policies, telling the truth about our fiscal challenges, and demonstrating political courage, we can restore our fiscal health and build a more secure financial future for all Americans.
CLICK HERE TO READ MORE BY REP. RON ESTES
Ron Estes, one of only a handful of engineers in Congress, worked in the aerospace, energy and manufacturing sectors before representing Kansas’ 4th Congressional District since 2017. He serves on the House Committee on Ways and Means and Joint Economic Committee.
