The U.S. House just passed another covid relief bill with a 1.9 trillion price tag. Trillions more after more than $5 trillion spent on covid relief, Federal Reserve actions and various emergency expenditures so far in the last 356 days. In 2021, the Federal government is only projected to take in $3.863 trillion, primarily from taxes.
These numbers are astounding when one looks at the broader picture. Vacations are resuming, most businesses are operating at some capacity and restaurants are busy. While vaccine costs are legitimate, most of the U.S. economy has rebounded. Is further stimulus really necessary given employment gains, stock market performance and overall growth since the fall?
The U.S. government, already running a large deficit, is only allocated a certain amount of funds. U.S. Government spending for FY (Fiscal Year) 2021 is $4.829 trillion. Two-thirds of that amount is mandatory spending for Social Security, Medicaid, Medicare
The mandatory budget will cost $2.966 trillion
Social Security ($1.151 trillion)
Medicare ($722 billion)
Medicaid ($448 billion)
The rest goes to mandatory programs ($645 billion)
-unemployment compensation, nutrition programs, child tax credits, student loans, unemployment compensation, military and government pensions / benefits.
National debt interest payments will be $378 billion
STAY WITH ME HERE AS THE BIG PICTURE WILL COME INTO FOCUS!
Discretionary spending (everything else) for FY 21 is $1.485 trillion
For comparison, let’s look at discretionary spending in 2019:
The numbers are staggering when we see just how much the government spends at the federal level for all those programs like space exploration, scientific funding, educational aid and of course the great, American military. The U.S. armed forces, the most high-tech, lethal and deployed military in the world receives a massive infusion of funding, annually. This figure dwarfs the rest of the world and is greater than the next ten countries combined.
The U.S. military budget for FY 2021 is $636 billion, plus an additional $69 for Overseas Contingency Operations. Add to this $228 billion for Departments that support the military, homeland defense and border operations. $933 billion total. Yet, most Democrats in Congress and some Republicans want to spend more than double that amount for the NEXT covid relief bill.
Bills passed by the last Congress and signed under President Trump also added to the deficit, included wasteful spending and allocated unspent money. Most of the money was simply created by the Federal Reserve and U.S. Treasury, with no added income or spending reductions to compensate. While debt is a common tool for individuals business and governments, only the federal government simply MAKES new money when it wants to spend more.
Imagine raiding your home ‘Monopoly’ set to put a down payment on a new car. When the liberal, N.Y. Times admits the new money is sourced “out of thin air”, the practice should be troubling to taxpayers. https://www.nytimes.com/2020/04/15/business/coronavirus-stimulus-money.html
Forbes reports that much of the targeted money will go to “another round of $1,400 stimulus checks for individuals, expanded federal unemployment insurance of $400 per week through the end of August, a major expansion of the child tax credit, $130 billion for schools, $160 billion for coronavirus testing, tracing, and vaccines, roughly $7 billion for small businesses and $350 billion for state and local governments.” The NY Post notes N.Y.C. would receive about $5.6 billion if the bill passes and N.YS. would receive $12.7 billion. This would be more than the entire budget for the U.S. Departments of Food and Agriculture.
The bill includes $75 billion for vaccination, testing and other pandemic medical supplies. Maybe this amount should be a standalone bill, addressing the virus itself? While a government check is nice, do we really need it as individuals or as a country? The bill will come due some day.
sources: thebalance.com, congress.gov, usa.gov/budget