To the Editor:
Our president and other Democrats have proposed a massive new "human infrastructure plan."
The U.S. has an unsustainable debt load of $28.5 trillion and Biden is planning to add much more to it with his $3.5 trillion incremental spending plan. This will be the largest expenditure ever undertaken by the federal government but wait, it gets worse.
Much of this $3.5 trillion plan is only a down payment. A lot of this is only for the first year's spending. He plans for recurring expenditures, so this may well wind up being closer to a $5.5 trillion spending spree.
The U.S. now has the highest level of national government debt as a percentage of our gross national product, worse than Italy, Greece, and a whole host of third-world countries.
Should you care? Yes, because we, the middle class, are going to have to bear the burden of this spending, the resultant debt, inflation, and high-interest rates.
People ask, "Where is this money going?" No one is really sure. A better question - where is it coming from?
Biden has said it will come from increasing the taxes paid by the "rich" and corporations. "Pay your fair share," he says.
Let's look at our federal budget.
Our annual income from all sources has averaged about $3.5 trillion a year and has been steady over the past few years. Individual income taxes contribute about $1.7 trillion of this.
But our spending has outpaced our revenues and it's growing. In 2019, the Trump budget had a shortfall between revenues and expenses of $900 billion, so we borrowed it.
Biden's 2022 budget plan has revenues increasing to $4.1 trillion, but expenditures climbing to over $6.0 trillion. This is an annual deficit of $1.9 trillion for 2022, up $1 trillion from pre-pandemic days, and this is before his big spending plan.
Even if Biden doubled everyone's income taxes, he couldn't close the budget gap.
The "rich," i.e., the top 1% pay almost 40% of personal income taxes, and this percentage has doubled since Reagan. The top 10% pay 70% of income taxes. How much more can we count on from them?
Corporations pay less than 10% of all income taxes.
What politicians fail to understand (or don't want to) is that jobs, money, and capital are mobile. The rich can take advantage of tax preference items and corporations can move money as well as jobs to take advantage of lower tax rates.
But the national debt will still be there, for us to pay.
Interest on our national debt is about $400 billion a year. This is low thanks to the Federal Reserve keeping rates artificially low, but growing levels of debt combined with inflation and higher interest rates will soon bring this up to $1 trillion - greater than our military budget and about 16% of Biden's budget.
The bottom line is that we can't afford the wild new spending that Biden is proposing. We can't even afford his 2022 budget.
Perhaps the Republicans are right in refusing to approve an increase in the debt ceiling without substantial concessions to the reckless spending proposed by Biden and other Democrats.
Rep. Van Drew and Sens. Booker and Menendez are smart legislators and need to hear from us all asking them to fight for a sound fiscal policy because we will be the victims if we don't speak out.