We’re going to see a big brawl starting this week over our debt-drenched budget and how to bring expenditures (now at more than $6 trillion budget) back down to earth. House Budget Committee Chair Jody Arrington is set to release a GOP fiscal plan that is a big course correction. It won’t solve our financial problems – but it will stop the bleeding. Arrington says that “the plan reaches a balanced budget in 10 years without a penny of new taxes. We grow the economy and cut spending.”
The Democrats and Biden are hysterical and threatening to shut down the government to keep the current runaway train of spending over the cliff.
To get a sense of the stakes here, consider that the fastest growing component of the budget over the next decade — other than the Green New Deal — is interest on the now $26 trillion national debt. The GDP is $27 trillion. In the weeks ahead the debt will be larger than our annual GDP. Interest payments, which will soon reach $1 trillion, will be like a Pacman swallowing up more and more of the entire budget.
Our ace economist EJ Antoni highlights a troubling trends. Almost $8 trillion of low-interest-rate debt will roll over at much higher rates. Instead of paying 2 and 3% interest on bonds, we will be paying close to 5% and maybe more if the Fed has to raise interest rates again. Biden has created a fine fiscal mess, and it will take years to get out of it. Arrington is right: let’s start right now.