. To compound matters, Congress is considering an omnibus appropriations bill for fiscal 2023, which began Oct. 1, 2022. Even though deficit spending is out of control, members of Congress, both Democrats and Republicans, want to increase spending by 10% from current levels. Republicans want more defense spending. Democrats want more discretionary domestic spending. Quietly both parties are negotiating even more budget-busting policies.
Neither party talks about revenue enhancers to pay for business tax cuts and expanding income transfers. Yet costs for servicing the federal debt are higher. Economic growth. Inflation is proving to be entrenched. A recession looks likely in 2023. In a recession, federal tax receipts fall and federal spending rises for unemployment benefits and other stabilizers. In recessions, federal deficits explode.
The negotiators for the omnibus appropriations bill know all this, but both parties just want to keep spending with borrowed money. So bring on a debt ceiling crisis. The Treasury is right — a debt ceiling crisis will raise the cost of capital for American business. A debt ceiling crisis will raise borrowing costs for the federal government, which must pay interest on a net federal debt of almost $25 trillion. Every 1% increase in borrowing costs equals $250 billion or 1% of GDP. The Treasury is right, a debt ceiling crisis increases uncertainty, which causes business investment to slow.
Only a crisis will enable Congress to tell the truth and find a true path forward involving higher taxes and fiscal prudence for entitlements, Social Security, Medicare, and Medicaid. If Congress can’t find that fiscally responsible path, the nation
Unfortunate that it would have to come to that, but no one in Washington has any fiscal discipline. Sure, one side is more prone to overspend on entitlement programs than the other, but neither side has the stomach to demand fiscal responsibility from fellow representatives.
If PEOPLE can't be fiscally responsible..borrowing way beyond their limits & asking for Gov rescue, how can we expect How can we expect a give OF THE PEOPLE , BY THE PEOPLE & FOR THE PEOPLE to be fiscally responsible... or for both, just responsible for themselves in general?