The U.S. government’s fiscal year 2021 has come and gone, reminiscent of the elusive Dow 36,000.
Authors James Glassman and Kevin Hassett predicted this milestone back in 1999, expecting it to be reached by 2005—an estimate that remains disappointingly off by 17 years. This raises an important question: Is President Biden aware that the government he leads is teetering on the brink of insolvency?
Many Americans, akin to Biden, seem uninterested in the fiscal year’s concluding numbers. After generations of budget deficits without visible repercussions, a sense of complacency has emerged about Americans’ ability to consume without accountability. For the electorate, deficits appear to be a non-issue.
Currently, only conspiracy theorists and fringe thinkers still regard the outdated practice of government accounting as significant. Why bother with such details when one can invest in Tesla shares and anticipate an impending apocalypse?
For those who actually care, here are some key highlights and lowlights…
During the fiscal year 2021, which spanned from October 1 to September 30, total government receipts amounted to $4.046 trillion. This signified an 18.3 percent increase of $626 billion from fiscal year 2020.
Conversely, spending for the same period rose by 4.1 percent, totaling $6.818 trillion—an increase of $266 billion from the previous fiscal year. While receipts increased, spending surged even more, leading to a budget deficit of $2.772 trillion.
To be blunt, a budget deficit of $2.772 trillion is nothing short of a national disgrace, reflecting a significant failure on the part of government. However, it is a slight improvement over the $3.132 trillion deficit incurred in fiscal year 2020. Still, the U.S. government spends as recklessly as a banana republic.
Let’s delve deeper…
An Invitation to Total Ruin
Over the two years ending September 30, 2021, the federal government borrowed and spent $5.9 trillion. Can anyone be surprised that annual price inflation is rising at the fastest rate seen in 30 years?
Throughout fiscal years 2020 and 2021, the federal government expended $8.08 billion every day from a virtually empty purse. Much of this debt was financed by the Federal Reserve purchasing U.S. Treasuries with credit conjured out of thin air.
The dominant mindset in Washington, driven by Democrats, is that governmental spending should know no bounds, especially when directed towards social programs and climate control initiatives.
Moreover, there’s an underlying assumption in Congress that, during crises, the major banks are “too big to fail.” The government often finds it more straightforward to avert bankruptcies by extending credit or expanding debt rather than allowing natural consequences to unfold.
The problem with this financial philosophy is that it paves the way for total disaster. Debt cannot infinitely outpace economic output. It is not feasible for everyone to rely on perpetual bailouts.
Ultimately, the bills come due. There’s simply no way around it. If debts cannot be paid honestly, they must be settled through default or inflation.
This should be clear and fundamental. Yet running massive deficits to delay economic decline is paradoxically celebrated as a success by government economists. In reality, these expansive deficit policies are alarmingly myopic.
Are You Vulnerable to Physical Violence?
Most recently, the government exhausted its resources battling the coronavirus pandemic. With its savings consumed, Washington finds itself ill-equipped to respond when the next economic downturn arrives.
Furthermore, this recent spree of spending has accelerated an already unsustainable debt trajectory…
Before 2020, the nation’s obligations were already staggering, only worsened by the trillions spent as a result of restrictive government-mandated lockdowns. These self-inflicted crises have proven insurmountable.
We face soaring price inflation, disrupted supply chains, widespread dependency, dollar devaluation, government-sanctioned homeless encampments, and bubbling stock and housing markets. Not to mention the debacle of Afghanistan and the rise of non-fungible token digital art.
But that’s just scratching the surface…
Gavin Newsom. Jay Powell. Janet Yellen. Kamala Harris. The IRS. Woke propaganda. Vaccine mandates. LAUSD. Anthony Fauci. Jamie Dimon. Diesel-powered EV charging stations. Greta Thunberg. The list goes on…
Budget deficits, spending bills, and temporary employment will continue to yield short-term benefits for politicians. However, such measures will significantly worsen the broader economic collapse when deflation or inflation—take your pick—inevitably unfolds.
Perhaps some experts in Washington can stave off the collapse for a bit longer. Yet, it is unavoidable.
This uncomfortable truth and its implications seem to have eluded major media outlets as the fiscal year 2021 drew to a close. If it was reported, we certainly missed it.
So, we’re offering a straightforward message here…
More than you might think, you are at risk of financial, economic, and political collapse. In fact, This reality is unfolding right now.
Especially if you reside in one of America’s numerous liberal-led cities, you are increasingly at risk of physical violence.
America’s decline into chaos has commenced. The opportunity to escape is rapidly dwindling.
Sincerely,
MN Gordon
for Economic Prism
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