Government Accountability Office: U.S. on Unsustainable Financial Path

Federal watchdog reveals that Congress continues to spend money more than it collects in tax.

Audit of federal government financial statements by the U.S. Government Accountability Office found that it had been rigged. “continues to face an unsustainable long-term fiscal path.”

According to the Congressional Research Service, the federal government had $6.27 trillion in spending and $4.9 trillion in revenue in fiscal 2022. This resulted in a $1.38 trillion deficit. U.S. Treasury. The Federal Government Budget had its most recent surplus in 2001. This was one of five surpluses it has experienced in the past 50 year.

Middle Tennessee State University economics professor Daniel Smith stated that it is not surprising that the federal government overspends.

“It has been known by economists and politicians for a while that our current level of spending is unsustainable,” In an email to The Center Square, he stated the following: “Our current debt to GDP ratio ranks the United States as one of the highest in the world. Most of the other countries in that category are not doing well economically. And, the United States’ debt is under-reported because it doesn’t include unfunded liabilities, which raises our debt to over $200 trillion.”

Smith explained that although the federal budget has many decimal places it is understood by most Americans. “you can’t sustainably spend more than you earn.”

“Debt can be undertaken if it is used for productive investments, but is a bad idea for funding current consumption,” He stated. “Most of what the U.S. is spending money on, of course, is current consumption (transfers), not productive investments.”

He said that the federal government is moving towards “a situation where debt service cost can potentially become the biggest budget item of the U.S. government.”

Michael Hicks from Ball State University is the director of the Center for Business and Economic Research. He said that although most Americans understand the problem. “few appreciate the size or source of the issue.”

“For example, we could eliminate all foreign aid and the entirety of the military, and all military retirement pay and all Veterans Affairs benefits, and still not have balanced the budget last year,” The Center Square was informed by him. “Alternatively, we could eliminate the growth in Medicaid spending from the Affordable Care Act, and all [Temporary Assistance for Needy Families], [Supplemental Nutrition Assistance Program] and other cash assistance programs, and still not balance the budget.”

Hicks indicated that to balance the federal government’s budget, Hicks would need deep cuts to Social Security and Medicare spending. “much higher taxes.”

Donald Grimes is a University of Michigan regional economist who attributed the problem to an increase in spending on Medicare and Medicaid.

“I don’t think people understand this, which is why claiming we don’t need to do anything about these programs’ cost is so politically popular. Since I don’t think we are going to cut spending on these programs by any significant amount I don’t see any other realistic alternative to solving this future crisis other than implementing a national value added tax,” The Center Square was informed by him. “The idea that you can raise the necessary amount of money by just taxing the rich is a Santa Claus fantasy. Other countries realized that the only way they can raise the money to pay for these programs is a value added tax, eventually so will we.”

A VAT (value added tax) is a tax on consumption that is collected at each stage in a product’s manufacturing, from the sale or purchase of raw materials through to the final purchase. The sales tax in the United States is paid by consumers at the point of final sale.

The U.S. Government Accountability Office’s 270 page financial document Audit A government audit team also stated it is unable to comment on the accuracy of government bookkeeping because of ongoing issues. The problems include long-standing financial management challenges at the Department of Defense as well as poor accounting for transactions among government agencies. Further, it highlighted problems with the Small Business Administration’s pandemic relief programs, Department of Education’s loan programs, and $247 million in improper payments. Unauthorized payments are those that were not made or in the incorrect amount. Payments that are not correct include overpayments or underpayments.

*As an Amazon Associate I earn from qualifying purchases