There was a lot of wasteful spending during the pandemic.
That was bad news, but what’s far more worrisome is that politicians used the pandemic as an excuse to permanently increase the spending trendline.
Here’s a chart based on CBO’s historical data and future projections. I added a yellow line to show the trend line based on spending growth from 2000 to 2019.
As you can see, spending soared above the trend line during the pandemic, came down slightly in 2022 and 2023, but now is projected to stay way above pre-pandemic levels.
At the risk of understatement, this added spending burden is the main reason America is in fiscal trouble.
To get an idea of how much spending has exploded in recent years, it makes 2008-2010 (Bush’s corrupt TARP bailout and Obama’s failed stimulus) look like a tiny blip by comparison.
Now I’ll add a caveat. Even without the pandemic spending orgy, America’s budgetary was on track to deteriorate. The retirement of the baby boom generation, combined with poorly designed old-age entitlements, translates to a higher spending trend line.
That being said, Trump and Biden combined to make a bad situation much worse.
Another caveat is that the headline on this column is an exaggeration. I simply like using everything-you-need-to-know as a rhetorical device when I have a very compelling visual or example.
I’ll close with the optimistic observation that it’s still relatively simple to solve America’s fiscal problems. All that is required is multi-year spending restraint.
P.S. The United Kingdom is suffering from the same problem of temporary emergency spending morphing into a permanent increase in the burden of government.
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