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THE U.S. NATIONAL DEBT is on the verge of reaching $31 trillion according to recent data released by the Department of the Treasury, which places the nation’s liabilities close to $30.9 trillion.
This new record comes after months of statements from the Biden administration claiming that his tax reform would lower the U.S. fiscal deficit in the short term.
Before the pandemic, the U.S. public debt was just over $23.7 trillion. After three stimulus plans to counteract the effects of COVID-19, as well as an infrastructure investment plan, the public debt stood at $28.9 trillion by the end of 2021.
In less than two years, public debt grew by almost $5.2 trillion. Subsequently, public spending was reduced considerably with the end of federal pandemic programs. Even CBO projections pointed to a reduction in the fiscal deficit.
Despite the additional revenue obtained by President Biden through raising the marginal income tax on the wealthiest 1% and raising taxes on dividends, the deficit reduction impacts were partially erased after the approval of two new spending plans by the Democratic majority in Congress, and another by Biden himself via presidential decree.
The first spending program came with a bipartisan plan known as the Chip Act that will bring public funding to the U.S. semiconductor industry. The second plan, which had no Republican support, came with the misnamed Inflation Reduction Act, which will not reduce inflation but subsidize clean energy projects and some drugs through Medicare.
The third spending plan was enacted by President Biden, without Congressional approval, to forgive up to $20,000 in college debt for those earning less than $125,000 a year. The price tag of this new spending plan is unknown, but some estimates place the cost of Biden’s executive order between $0.5 and $1 billion.
“You know, Republicans talk about being fiscally responsible,” Biden ranted at the DNC reception, “Last year I reduced the deficit $350 billion. You know how much this year, not counting the Medicaid changes? One trillion seven hundred billion dollars. So I don’t want to hear it from Republicans about fiscal responsibility.”
Heritage Foundation budget expert David Ditch, when asked by Fox News, commented that President Biden’s boast of deficit reduction is hollow since much of the deficit reduction is due to pandemic spending programs ending, rather than direct executive action.
Economist, writer and liberal. With a focus on finance, the war on drugs, history, and geopolitics // Economista, escritor y liberal. Con enfoque en finanzas, guerra contra las drogas, historia y geopolítica