America’s debt clock has ticked past $33 trillion, reaching a billion dollars of spending every hour. Meanwhile, the monetary policy conditions that have emboldened Washington’s spending spree are over. Current estimates predict a $2 trillion deficit for 2023, while the Federal Reserve’s rising interest rates are quickly forcing payments on that debt to become the highest budget item for the federal government.
America’s fiscal crisis is here.
Unsurprisingly few in Congress, of course, have an interest in recognizing the monster they have created.
Right now, the crisis in Washington is not the economic reality federal spending has created, but the small handful of legislators trying to disrupt the process that has created these conditions. To read Beltway-based publications, the real threat is a government shutdown, eroding support for yet another round of Ukrainian funding, and “far right” legislators seeking to return to a normal appropriations process.
The face of the opposition is Florida Congressman Matt Gaetz, who has made himself one of the most hated men in Washington as a result of his unrelenting criticism of Republican leadership, his entrenched opposition to budget-by-continuing resolution that has become the norm, and his made-for-clip sharing charisma that allows him to effectively communicate the corruption, hypocrisy, and relative dysfunction of the current political elite.
Gaetz, who helped spearhead the historic coronation of Speaker of the House Kevin McCarthy, has managed to build up enough of a coalition of his colleagues to stymie recent attempts to kick the can down the road. His stated goal is to force McCarthy to honor the promises made to the GOP caucus earlier this year, to force the House to vote on twelve single-issue spending bills — as required by the Budget Control Act of 1974 — rather than the bundled-together appropriation bills that have become the DC norm since the 1990s.
The reality is that any return to legislative normality is a threat to modern Washington. Most of Congress has no interest in vetting appropriations bills, as illustrated by the backlash Rep. Thomas Massie faced by standing in the way of allowing a voice vote to authorize $2 trillion covid-related spending bills. The role of a modern member of Congress is to fundraise and beat the market on stock trades, allowing the professional political class embedded in government bureaucracies to do the real governing.
In an all-too-perfect illustration of this dynamic, last Friday the Republican Appropriations Chair Kay Granger left a Congressional meeting dedicated to the upcoming spending battles early to attend a fundraiser with lobbyists for her political committee.
While the Gaetz-led coalition’s battle for restoring normality to the appropriations process is commendable, it is noteworthy that it is ultimately insufficient to tackle the basic math problems DC faces. Even the highest ambitions from fiscal hawks have been to cap discretionary spending — roughly a third of federal spending — to 2022 levels, baking in the massive spendingl increases seen during the Trump presidency. Untouched are the much larger drivers of fiscal destruction, military spending, entitlements, and the aforementioned financing of the debt. Even the uni party’s dogmatic dedication to the Zelenskyy regime has made the relatively low-hanging fruit, ending future aid to Ukraine that has seen its public support collapse in recent months, a seemingly impossible political sell on Capitol Hill.
In modern Washington, any responsible voices on fiscal issues will necessarily be presented as reckless extremism. The sacred cows of the Beltway must be slaughtered. National default on debt obligations, including entitlement promises, will be required. Those brave enough to state the obvious will be ruthlessly attacked by the political class and the obedient press, just as Ron Paul was during his Congressional career.
America’s fiscal crisis has required decades of work by both political parties to create. The underlying incentives of America’s political process reward economic myths over recognizing this reality. Younger generations will continue to be made poorer thanks to the policies authorized by the older legislative body in US history. Standing up for a basic return to procedural normality is the easiest challenge facing Congress. Anyone unwilling to take that stand will only continue to fuel a Washington that is preying upon the future of its citizens.
As Ludwig von Mises understood, the destruction of a nation can only be stopped with a change in an underlying shift in the ideology leading to its destruction. This is why the Mises Institute is dedicated to telling these unpopular truths. If you support this mission, please consider making a $5 donation this week during our fall campaign.