If you’ve ever heard a Joe Biden speech where the economy is mentioned, you’ve heard this claim made – Biden himself has reduced the deficit, which is current year spending by the federal government in excess of incoming revenues to the Treasury, by $1.7 trillion dollars. On some of his foggier days, he’ll claim he’s cut the debt, cumulated spending shortfall versus revenues to the Treasury for the entire history of the country. On several occasions where Biden doesn’t appear to know where he is, who his audience is, what building and/or state he’s in, or what side of the stage to depart when he’s mercifully finished butchering his read off of the teleprompter, he’s claimed he’s cut both the deficit and the debt, sometimes even in the same sentence.
Of course, it’s not been true a single time out of the several dozen instances he’s uttered the claim. It’s such an egregious lie that even Glenn Kessler of the Washinton Post awarded the ‘bottomless Pinocchio’, which Kessler felt the need to create specifically to apply to the repeated falsehoods Donald Trump would tell even after they were debunked. Why was it a lie?
Pre-COVID, the record on deficits dates back to the first couple of years after Obamacare was jammed down our throats by the Obama-Biden administration. Republicans and fiscal hawk think tanks rights predicted that creating the new health care entitlement would cost trillions of dollars if implemented, and in the years 2009-2011, the U.S. saw deficits running between $1.3 and $1.4 trillion each year. It was considered staggeringly unsustainable, roughly doubling the deficits of the previous six years in just those three years.
Those deficits receeded a bit from their peak, but still remained for the duration of the ’10s between $500 million and $1 trillion a year. And they began to go up in the later part of that decade. Then COVID hit.
Once the country locked down, thanks to Donald Trump essentially handing over the keys of the economy to Dr. Anthony Fauci, the task to restart the engines required a lot of cash. Record levels of it, in fact. We topped $3 trillion in 2020, $2.8 trillion in 2021, and 1.4 trillion in 2022. The reason for the lower marginal deficits compared to the all-time one-year high in 2020 was because the bipartisan COVID relief packages Congress authorized had sunset provisions in them so that once the country did restart, we would taper off the spigot of federal money and hopefully keep from sending the nation into runaway hyperinflation.
Joe Biden was not in office at the time the COVID relief packages were passed in Congress, nor did he had anything to do with the sunset provisions being carried out. The reason we had a $1.4 trillion deficit in 2022 during Biden’s presidency versus $3.1 trillion in the last year of Trump was due to Congressional statues, not Joe Biden’s presidential actions. So Biden claiming he reduced the deficit is trying to take credit for actions not his own. That’s certainly not the first time a president has done that. But claiming he reduced the debt? Just a bald-faced lie. The debt has not been reduced since a four-year window during the end of the Clinton administration and the beginning of the George W. Bush era.
Yet Joe Biden wants the credit for Congressional action, does he? Let’s give it to him. Remember how I said the COVID relief packages sunset? Well, not exactly all of them.
The Employee Retention Credit was created during the pandemic in a desperate attempt to allow companies large and small keep employees on the payroll, even if there was no business activity underway to support keeping them. If you kept employees technically hired, you could claim a significant tax credit per employee. That, too, expired, except that Congress last year resurrected that provision, even though COVID has been declared over and the economy, according to Joe Biden, is booming and better than ever. The ERC was revised, extended, and loosened in its parameters so that more companies could qualify for it. I guess that’s the good part. The bad part is it leaves a hole for fraud potential big enough through which to drive a semi.
The revisions to the ERC were signed into law by Joe Biden. So while Biden wants credit for Congressional action on the deficit he had nothing to do with, we now have Congressional action that he directly signed into law, which is ballooning the deficit this year while few people take notice.
As more and more companies of all sizes figure out that you can now claim even three years from now tax credits from the pandemic years for employees you kept around, even in the loosest definition of what an employee is, they’re all grabbing the cash as fast as they can. All those tax returns for the pandemic years have been filed, but retroactive claims are being filed, and Uncle Sam is printing refund checks for the ERC that were not claimed at the time. Each month, the federal ERC outlays have been growing and spreading faster than the COVID virus did in 2020. As of July of 2023, the Treasury paid out $40 billion dollars in ERC claims alone. August is expected to be even higher than July was, but if you average out July over the course of a year, that’s half a trillion dollars just in ERC claims. And it’s all signed and approved by Joseph Robinette Biden, Jr.
In April of this year, before the scope of the ERC virus was fully realized, experts predicted the deficit in 2023 would be around $1.5 trillion.
Now, it’s suddenly expected to top $2 trillion.
So will Joe Biden be held accountable for a 50% climb in deficits in just one year? By this media? Hardly. But here’s the hard truth about Bidenomics. Yes, the country is still trying to wallpaper the country in cash, even though now in a more backhanded fashion. Biden and the Democrats are in a race against the clock to see if they can keep the country on a sugar high of cash long enough to get through the 2024 election before the coming hangover and resulting recession hits. Time will tell. But the damage is being done in real time. The United States added a trillion dollars to the national debt just in the last three months. Because of Joe Biden’s Inflation in Perpetuity Act of 2022, and the resulting slate of interest rate hikes by the Fed to counter it, the interest payments alone on the debt have increased almost $700 million dollars the first half of this year alone, and that’s only going to increase.
In short, we have not even begun to fully realize how much the government shutdown cost the country. We’re still paying for it, and don’t even know when we’ll get to the point where we see an end to the invoices hitting the inbox. And that doesn’t even consider the human element – mental health issues, social anxieties, suicides, and setbacks in educational learning by children at all levels.
So when we see current and previous members of government at both the state and federal level begin to creep up in media saying we might need to mask up and/or shut things down again this fall because of some new variant of COVID, or mandates of new vaccines that have not gone through any human testing as of yet, I’m thinking those who espouse those views should be disqualified from serving again. If there are lessons to learn from the COVID era, it’s that we simply cannot afford to make the same mistakes again.
By the way, the picture at the top? Our current debt is two and a half times larger than when that picture was taken…in 2010.
