Wednesday, September 15, 2021

OCPA: Biden administration’s fiscal policy has echoes of Afghanistan


Biden administration’s fiscal policy has echoes of Afghanistan
By Jonathan Small

Amidst the ongoing chaos of U.S. withdrawal, it’s widely understood that the Biden administration’s handling of Afghanistan is a debacle that will have long term, negative consequences. Unfortunately, the administration’s approach to fiscal policy falls into the same category.

The spending package initially approved as a COVID bailout in 2020 was enormous, but some could defend it as a once-a-century emergency response. Instead, Washington politicians are now treating it as a floor for future spending, creating levels of deficit spending unimaginable just a few years ago.

The consequences of that spending are already being felt by working families in Oklahoma, and the situation will only get worse with time if it is allowed to continue.

A recent forum hosted in Oklahoma City by the Millennial Debt Foundation, which seeks to “lead a generational conversation about fiscal stewardship, the role of the federal government and America’s deficit spending crisis,” highlighted facts that all citizens should hear.

U.S. Sen. James Lankford, R-Oklahoma City, pointed out something that is obvious to most working families, but not to Washington politicians—that there’s a big difference between millions, billions and trillions. To illustrate that fact, Lankford notes that a million seconds is 11-and-a-half days. A billion seconds is 31-and-a-half years. And a trillion seconds is 31,688 years.

Yet many in Washington now act as though multi-trillion-dollar spending sprees are no big deal. Those spending advocates are wrong. Repeated spending blowouts have a compounding effect over time, as noted by Weston Wamp, founder of the Millennial Debt Foundation.

“If you look at the current spending plans of the Biden administration, ten years from now we’ll have $40 trillion just in debt held by the public,” Wamp said. “Forty trillion means that if you just have just 1 percent increase across all federal debt in interest rate, that’s $400 billion a year.”

Huge deficit spending is fueling inflation and will ultimately drive up interest rates. Who pays the price for those two trends? The poor and middle class. The average Oklahoman cannot simply forgo groceries and other staples when inflation causes prices to soar. They simply pay more for less.

Advocates of massive spending increases argue that tax increases will cover the tab. But tax increases also cause the cost of goods and services to increase or result in reduced availability of those goods and services. Again, the working class bears the burden.

It’s too late to undo the damage of the Biden administration’s Afghanistan policy, but there’s still time to address fiscal policy. Oklahomans should pray that our national leaders do so, and soon. As horrible as the Afghanistan situation has become, much of its impact is felt in overseas foreign relations, although the repercussions may ultimately reach our shores. But with Biden’s fiscal policy, the negative impacts will be felt within our own homes.

Jonathan Small serves as president of the Oklahoma Council of Public Affairs.

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