The debt deal: Unspoken truths

President Biden gave his first speech from the Oval Office on June 2nd in which he celebrated the debt deal as “we averted an economic crisis and an economic collapse as nothing would have been more catastrophic than defaulting on the country’s debt.” Sadly, this was all misinformation.
Holy Scripture says, “There is a time to be silent and a time to speak” (Ecclesiastes 3:7). Now is the time to speak!!
Following Biden’s Inauguration, the headline was “The Biden Team Wants to Transform the Economy.” Two years later a recent Wall Street Journal survey said the Biden Administration’s economic policies are driving the country into a recession in 2023 as their central planners have engineered an inflation surge by distorting supply and demand. Translation: rather than adopting policies to juice supply, the Administration juiced demand with stimulus payments—then realizing their mistake, rushed to kill demand (aka the economy) by increasing interest rates—while still ignoring supply. Larry Summers, head of the Council of Economic Advisors under President Obama, called this the least responsible economic policy in 40 years.
Biden submitted his 10-year budget in March which proposes to add $17 trillion more debt (to a total of $48.6 trillion) by running an average annual deficit of $1.7 trillion. However, the Committee for Responsible Federal Budgets has shown this year’s deficit is on track at $2.1 trillion, which is 8.1% of Gross Domestic Product (GDP). The historical deficit average is 2.5% of GDP; in 2019 before Covid it was 5.1%. At this rate our National Debt will be $53 trillion by 2033, and this doesn’t even include the $70 trillion of unfunded liabilities for social security/Medicare that the government doesn’t record on our books (more misinformation).
We have a spending problem as nominal spending for this year has increased 11% to $6.6 trillion. Yet the media and our political leaders hail the debt deal as the solution to our problems. This is total insanity—how does borrowing more money solve our debt problems? We are spending ourselves into bankruptcy, and our foreign creditors know it as the “De-Dollarization” of the global economy is now happening at a stunning pace.
By 2033 Social Security and Medicare will be bankrupt, the U.S. will have lost is Global Reserve Currency status, stagflation will be ingrained into the economy, and someone will have to start repaying the debt. It won’t be the poor and the illegal immigrants as they will continue to receive their handouts in return for 51% of the votes. It won’t be the rich and their cronies in Washington who will use inflation to their advantage. That leaves only the Middle Class whose wages will not keep up with inflation.

Steve Gardes is a Certified Public Accountant (CPA) and Certified Valuation Analyst (CVA) with over 40 years of public accounting experience.