The International Monetary Fund last week ripped the Biden administration’s out of control spending, calling it “out of line with what is needed for long-term fiscal stability.”
According to the New York Post, the IMF, an international organization aimed at fighting financial crises across the globe, warned that ever-growing national debt in the U.S. poses a long-term risk to the global economy.
“Something will have to give,” the IMF cautioned in foreword of the World Economic Forecast published on Tuesday.
“The exceptional recent performance of the United States is certainly impressive and a major driver of global growth,” the IMF said. “But it reflects strong demand factors as well, including a fiscal stance that is out of line with long-term fiscal sustainability.”
Unfortunately, the Biden administration has shown no intention of slowing down its spending.
Last month, the administration proposed a massive, $7.3 trillion budget for fiscal year 2025, the New York Post reported.
The Office of Management and Budget reported that the national debt would surge to $45.1 trillion by 2034 under the budget plan, according to the Post.
The IMF’s warning comes as the U.S. national debt is approaching $35 trillion, with the total rising by about $1 trillion every 100 days.
The cost the national debt is imposing on a yearly basis has also risen, as the U.S.’s debt interest payments topped $1 trillion in October, according to Business Insider.
“Is the national debt a critical problem?”
What’s more, U.S. debt-to-GDP ratio, which measures debt as a proportion of GDP, is climbing to concerning heights. According to a report by the World Population Review, the U.S. has the ninth-highest debt-to-GDP ratio in the world at 129 percent. According to the site, a debt-to-GDP ratio of 77 percent or lower encourages domestic economic growth.
In classic Biden fashion, the White House is blaming the problem on former President Donald Trump.
“The Trump tax cuts added $2 trillion to the debt with unpaid giveaways skewed to the wealthy and big corporations, and now Congressional Republicans are proposing another $5.5 trillion in tax cuts skewed to the rich, while raising taxes on millions of middle-class families,” White House spokesman Michael Kikukawa told the Post.
And Biden’s solution to the problem? More taxes.
Biden’s budget plan proposed includes hiking the corporate tax rate to 28 percent, while raising the minimum corporate tax rate from 15 percent to 21 percent, according to the Post.
He also proposed a minimum 25 percent tax on billionaires, “defined as those with a net worth of $100 million or greater,” according to the Post.
This comes as Biden is trying to force through $7.4 billion in student-loan debt cancellation.
Biden is attempting to use a different legal justification than the cancellation plan he tried to push forward last year, which was struck down by the Supreme Court as an overstep of his authority under Article II of the Constitution.
The new round of student debt cancellation is estimated to cost taxpayers $84 billion over the next 10 years.
Biden’s actions have done anything but put the U.S. on a trajectory for economic prosperity. As the IMF noted, while we have experienced growth, the careless spending will serve to deter the nation’s long-term future.
And Americans agree that the economic situation is dire. Only 28 percent of Americans currently view our economic conditions as excellent or good, according to a Pew poll from January. Meanwhile, prices continue to rise, with inflation being 3.5 percent from March 2023 to March 2024, a higher rate than was anticipated.
What the Biden administration needs to do is decrease its spending and pull money out the economy, so that inflation can be curtailed.
But instead of decreasing government spending, Biden is hell-bent on making American taxpayers bear the burden of his progressive policies.
Inevitably, raising wealth and corporate taxes will be detrimental to growth. Increasing tax rates will cause corporations to invest elsewhere and strike a blow to the American economy.
In this instance, the government needs to do less, not more. We need to decrease government spending, not increase it.
And while his comments were aimed for a different time, Ronald Reagan’s assessment of the issues plaguing the U.S. in his 1981 inaugural address are the same issues we face today. “In this present crisis, government is not the solution to our problem; government is the problem.”
And, as the IMF put it, something will have to give.
