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With the imminent passage of the Orwellian-named “Inflation Reduction Act” (a la “war is peace”), many people are focused on the $80 billion allocated to ballooning the size of the IRS. And rightly so — the estimate, put out by the administration last year, of 87,000 new IRS employees to be hired with those funds over time will create additional time and cost burdens for middle class Americans, as I wrote about previously.
But somewhat lost in this discussion is the rejection of the premise that the government needs to collect any more money. The government doesn’t have a revenue problem. It has a spending problem.
For the 2021 fiscal year, per the White House Historical Tables (1.1), the government took in more than $4 trillion from taxpayers and taxpaying entities. For FY 2022, it is projected to take in $4.4 trillion.
That is an utterly massive amount of money for any entity to control and disburse via expenditures. The number is so large that I think people have a hard time getting their heads wrapped around it — perhaps the reason why there isn’t enough pushback.
The problem is that spending by the government, particularly the federal government, is entirely out of control. If we look at the $4.4 trillion the feds expect to collect this year, it is double what the federal government spent just 20 years ago in 2002.
But even if we just look back a few years, we can see this spending monster getting more and more unmanageable. FY 2018’s government spending was $4.1 trillion. While still too much, if the government kept spending at that level, with the expected tax “revenue” from this year, there would be a $300 billion surplus! If officials spent at the level of FY 2019, the last full fiscal year before the insane COVID spending, they would basically break even.
But instead of trying to restore some fiscal normalcy and discipline, the Biden administration keeps spending. The Inflation Reduction Act, following the infrastructure spending bill, is just breaking up "Build Back Better" (or rather, Build Back Broke) into pieces.
Despite the record projected $4.4 trillion in revenue, and before some of the recent spending, and without the unusual and damaging COVID spending, the government was already projected to spend a whopping $5.8 trillion for this fiscal year, about a quarter of the entire GDP. That, for those of you who don’t like to do math in your head, is a deficit of $1.4 trillion already that would ultimately add to the national debt!
Furthermore, if the government was looking to audit something and find a few more bucks, perhaps it should start with government fraud and waste? I am sure that auditors would find some extra dollars there instead of harassing soccer moms because they forgot to report proceeds from listing their kids’ used sports equipment on eBay.We just need to reset the spending clock a few years back to be able to run surpluses, attack our national debt, and try to save the financial foundation of the country. We need more outrage about this overspending and more action. Otherwise, the government will keep spending until the economy and your wealth are completely destroyed
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Carol Roth is a recovering investment banker, the New York Times best-selling author of “You Will Own Nothing,” and a business adviser.