Take a moment to tally up all your household expenses and income from October 1st to September 30th. Will your income pay for your expenses past today, April 26? If so, you’re in better financial shape than the federal government.
For most Americans, today feels like just another Sunday in April. Spring has arrived, baseball season is hitting its stride, and summer is right around the corner. But today is also the day the federal government’s spending exceeds its revenues for the fiscal year. Today is Debt Day. Every dollar spent from now to October 1 is a dollar we cannot afford. Every dollar spent from now to October 1 is a dollar our children will eventually have to find a way to pay back with interest.
While the federal government running a deficit is, unfortunately, nothing new, the sheer enormity of this year’s red ink is astounding. At $1.8 trillion, the federal deficit will be almost four times larger than the previous record of $458 billion. Every Debt Day since the 2002 fiscal year has occurred at least three months later than it does this year. And during the four years from 1998-2002, the Republican-controlled Congress ran a surplus.
Why is Debt Day here so soon? Unbridled, irresponsible spending in the form of $700 billion for TARP, $787 billion in a so-called stimulus package, and $410 billion bill to fund the government with an eight percent average increase over last year.
TARP has proven both controversial and a miserable failure since its inception last fall. Proposed amongst a rash of Chicken Little rhetoric, the program was rushed through Congress with much fanfare but little foresight. The plan lacked taxpayer protections and, as we are experiencing, an exit strategy to get bailouts funds back. Seven months in, the private sector is wary of getting burned by the shifting political whims of Congress, and Treasury Secretary Geithner refuses to allow recipients of TARP funds to repay the money. Despite it all, consumer lending continues to decline.
Continuing this now well-established practice of government intervention, Congress next attempted to “stimulate” the economy with a $787 billion smorgasbord of borrowing. Packed with money for long-time liberal spending priorities that have little, if any, relation to economic recovery, the spending spree that Congress passed last February did not receive a single Republican vote in the House of Representatives.