Billionaire Elon Musk warned that the level of deficit spending under President Joe Biden is unsustainable.
The Congressional Budget Office released a new projected deficit Tuesday for fiscal 2024 of $1.9 trillion, up from its $1.6 trillion projection in February, according to The Hill.
“The federal government is spending America into oblivion,” Musk posted on his social media platform X on Tuesday.
His comment came in response to a post by the Wall Street Silver account highlighting that we’re on pace for more than $1.2 trillion in annualized interest payments on the federal debt.
The federal government is spending America into oblivion https://t.co/Ck59Clkra7
— Elon Musk (@elonmusk) June 18, 2024
Trending:
“Within the next few years, interest on the debt will exceed Social Security payments and become the largest item in the budget,” Wall Street Silver wrote.
The post included a graphic from the Federal Reserve showing the U.S. interest payments will exceed the total cost of funding the Defense Department, which has been the largest single ticket item besides the entitlement programs of Social Security and Medicare.
US federal interest payments now exceed the defense budget. pic.twitter.com/joZadHMP0U
— (((The Daily Shot))) (@SoberLook) June 18, 2024
The nonpartisan Committee for a Responsible Federal Budget further broke the interest payment number down for the fiscal year, which ends on Sept. 30.
“At a projected $870 billion, interest will surpass total spending on national defense ($822 billion) in 2024 and grow well beyond the defense budget over time,” the CRFB said.
Further, it said, “Interest costs will also slightly exceed net Medicare spending ($851 billion) this year and remain in line with Medicare costs in future years. That would make interest the second largest line item in the budget after Social Security.”
The organization projected that interest payments on the national debt will exceed $1 trillion per year by fiscal 2026.
By way of comparison, it noted net interest payments on the debt were $223 billion in fiscal 2015 and $352 billion in fiscal 2021, which included Biden’s first nine months in office.
The reason interest payments have exploded is the massive increase in spending under Biden and the Democrats in Congress, never returning the country to pre-COVID levels.
Additionally, the Federal Reserve increased interest rates to combat the 50-year-high inflation the nation experienced due in large part to too much deficit spending, economists on both sides of the political aisle have argued.
Total federal expenditures were $6.1 trillion in fiscal 2023 with a deficit of $1.7 trillion under Biden, compared with $4.4 trillion and a $984 billion deficit in fiscal 2019 under then-President Donald Trump.
Is federal deficit spending hurting Americans?
In fiscal 2020, the federal government spent $6.6 trillion, much of it resulting from the emergency COVID spending that Congress passed on an overwhelmingly bipartisan basis that year. The federal deficit was $3.3 trillion.
Some major new spending that passed under Biden included the $1.9 trillion American Rescue Plan, which had no Republican support in Congress; the $1 trillion infrastructure bill, which garnered some GOP support in the Senate and a handful of members in the House; and the Inflation Reduction Act, which had no GOP backing.
The “green” initiatives included in the IRA are costing almost three times more than the administration forecast, Bloomberg reported in August.
In April 2023, researchers at the University of Pennsylvania’s Wharton School of Business, working with the investment firm Goldman Sachs, updated their estimated cost of the legislation’s green initiatives from $385 billion over a 10-year period to more than $1 trillion.
The CRFB concluded regarding America’s fiscal situation, “Thoughtful deficit reduction can help to reduce interest costs, both by lowering debt and putting downward pressure on interest rates.”
“Absent such action, debt will represent a growing threat to our economy, our health care system, and our national security,” it said.
