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The national debt has more than doubled since this time last year to a record $1.7 trillion. The interest alone on that debt costs the U.S. $200 billion per year, according to some experts.
The government borrowed the money it used for stimulus and Covid relief packages. Those loans are secured by taxpayers at a time when tax rates are at an all-time low. That means we’ve got a shortfall of cash and a boom of spending. We hope you don’t run your household budget this way.
“While much of the borrowing of the past year was unquestionably warranted, we are now becoming dangerously numb to the trillions in debt that are piling up,” Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget, told the Wall Street Journal. “We need to start paying for what we spend. We need a plan to bring down the debt.”
Great! So what is the plan?
The President’s plan is currently to hike taxes. He met with lawmakers on Monday to discuss ways to pay for his $2.3 trillion infrastructure package, which is not yet on the books. Republicans made it clear that they do support a corporate tax hike but clearly, an influx of tax dollars is needed to support all this debt.
However, taxes are calculated based on money, goods, and services inside an economy, or gross domestic product. The Congressional Budget Office predicted that federal debt will equal 102% of gross domestic product by the end of the year and 202% by 2051. How can you tax what you don’t have to pay for this kind of debt?
This plan sucks.
