Debt, Deficits, and Default in President Biden ’s State of the Union

Romina BocciaPresident Biden devoted quite a few lines in hisState of the Union address to making various claims about deficits, debt, and the debt limit. President ’s Biden’s statements are indented below, my reactions follow.“In the last two years, my administration cut the deficit by more than $1.7 trillion — the largest deficit reduction in American history.”This claim is untrue. Deficits declined due to COVID-19 emergency spending waning, not because “the administration cut the deficit.” President Biden is claiming victory over deficits when his administration’s policies significantly increased deficits for the next decade and beyond. From the American Rescue Plan, to the infrastructure law, to new subsidies for a range of industries from clean energy and climate to semiconductor manufacturing, to student loan forgiveness, the administration has increased deficits byseveral trillions of dollars.Important context lacking from President Biden ’s claim is that deficits are still historically high. At current levels, the deficit compares to deficits during the Great Recession—the first time in U.S. history that deficits exceeded $1 trillion. Deficits reached unprecedented levels of $3.1 trillion in 2020 and $2.8 trillion in 2021. It’ s only from such excessive levels and due to COVID-19 waning as a public health emergency that the $1.4 trillion deficit concluding 2022 looks small in comparison.The Congressional Budget Office projects defi...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs