Tag Archives: Federal Spending

National Debt and Federal Spending

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Higher taxes, alone, are not the solution to out-of-control federal government spending. Americans need to understand and address the problem.  And, they need to convince politicians and bureaucrats to end their unfettered spending habits.

The national debt enables the federal government to pay for federal programs and services even if it does not have funds immediately available. Increased in federal government spending further increases the deficit.

The federal government spends money on a variety of goods, programs, and services to support the American public and pay interest incurred from borrowing.

  • If the government spends more than it collects in revenue, then there is a budget deficit.
  • If the government spends less than it collects in revenue, there is a budget surplus.

From FY 2019 to FY 2021, spending increased by about 50%, largely due to the COVID-19 pandemic. In fiscal year (FY) 2022, the government spent $6.27 trillion, which was more than it collected (revenue), resulting in a deficit.


Federal government spending pays for everything from Social Security and Medicare to military equipment, highway maintenance, building construction, research, and education. This spending can be broken down into two primary categories: mandatory and discretionary. These purchases can also be classified by object classand budget functions.

Tax cuts, stimulus programs, increased government spending, and decreased tax revenue caused by widespread unemployment generally account for sharp rises in the national debt.

References:

  1. https://fiscaldata.treasury.gov/americas-finance-guide/national-debt/
  2. https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/

Federal Stimulus and Relief Package Approved

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Congress has finally finalized the details on a stimulus package with a catchall measure to fund all federal spending for the remainder of the fiscal year ending in September 2021. This was accomplished after months of political gamesmanship between the two parties and Congress was at the peak of its dysfunction at the expense and added suffering of the American public.

Both chambers approved the measure and President Trump was expected to sign it. Final votes on the spending package were expected to approve it and clear it for Mr. Trump’s signature, but had yet to be scheduled. Once approved and signed, the emergency recovery plan would:

  • Provide funds for vaccine distribution.
  • Send direct payments of $600 to many Americans
  • Provide enhanced federal unemployment benefit payments of $300 per week until early spring
  • Provide food and rental assistance to millions of Americans, and
  • Provide hundreds of billions of dollars of relief to prop up small businesses, schools and other institutions struggling amid the pandemic.

Without action by Congress before the end of the calendar year, two programs designed to expand and enhance unemployment benefits are set to expire in the coming days, leaving about 12 million Americans without federal support. A number of other benefits are set to expire at the end of the year.

“We can finally report what our nation has needed to hear for a very long time,” Senator Mitch McConnell, Republican of Kentucky and the majority leader, said Sunday night. “More help is on the way.”

Both chambers approved the measure on Sunday night, and President Trump was expected to sign it before midnight. Final votes on the spending package were expected as early as Monday to approve it and clear it for Mr. Trump’s signature, but had yet to be scheduled.

References:

  1. https://www.nytimes.com/2020/12/19/us/politics/stimulus-deal-congress.html?referringSource=articleShare