The federal budget deficit debate

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Sal Iovino, Staff Writer

With the federal budget deficit expected to hit $2.3 trillion by year’s end, economists are currently divided about the economic future of the United States, and the Biden administration’s management of federal funds going forward. As it stands, the $2.3 trillion deficit is a $900 billion decrease from 2020, a year in which the $4 trillion COVID-19 relief package drove the federal deficit to the highest level seen since World War II. However, with another $1.9 trillion relief package in the sights of congressional Democrats, the federal deficit could balloon over the $3.1 trillion mark previously reached in 2020. While that number might sound bad, economists are largely divided on whether it really matters. For conservatives, the potential of a $2.3 trillion deficit is already a figure that is far too large. Many congressional Republicans have fought persistently against the potential of a new stimulus bill, claiming that the economic benefit of aiding those currently struggling will not lead to an equal increase in GDP. To some libertarians, the deficit is insignificant right now. With nearly 10 percent of the country still unemployed, as per Federal Reserve chair Jerome H. Powell, as well as the GDP still struggling to recover from the complete economic shutdown of 2020, congressional Democrats are taking a firm stance to get the $1.9 trillion stimulus package approved for small business and households to get back on their feet.

The United States is in need of stimulus right now, particularly amongst low income and minority communities, regardless of the implications on federal debt. Due to structural failures in the economic layout of the US, these communities have been hit hardest by the COVID-19 pandemic, and generations of families are put in danger due to the circumstances they are currently under. This is evidenced by the unemployment rates within the Black and Latino communities being 3.5 percent and 2.9 percent higher, respectively, than that of the white community. How can we expect minority communities to create any long-term economic success when every setback falls disproportionately harder upon them? Is the federal debt more important than the longevity of entire communities in nearly every corner of the United States? Even after the Great Recession, Black-owned businesses have still incurred far larger losses long term than those owned by other racial groups, predominantly white and Asian. Low wage labor-intensive jobs such as retail and food service are disproportionately worked by black and Latino employees, and these jobs have been revealed to be the most volatile markets during the pandemic. These jobs also often fail to include employee benefits, which has contributed to those who have lost their jobs facing challenges obtaining housing, healthcare, food and many other life necessities, all of which are more important than ever during this pandemic.

The increasing federal deficit is objectively concerning, regardless of partisanship. However, the need for stimulus to support the American people needs to be the priority in the nation’s capital right now. With cities and communities nationwide struggling to recover nearly a full calendar year after the first nationwide lockdown, placing humanitarian efforts above dollar signs is what needs to be done in Washington. There is a belief within America that there is a line drawn between economics and social responsibility, however, this is untrue, and quite frankly, dangerous to the future of our country. Although federal debt may force the government into a budget squeeze for the foreseeable future, there certainly are places where money can be redistributed from. 

Take, for example, the military budget. Is $732 billion annually fiscally responsible? It seems much more sensible to question why we are spending roughly the same amount as the next 10 countries combined on our military than to question the necessity of a stimulus package that will save lives and promote economic growth. The military is just one example of how the government bleeds funds, however. There are far more areas where money can be taken from and put towards slashing the federal debt created by stimulus, but the reluctance to change from the “American way” continues to hold both people and congressional officials back.

With the lives of the American people weighing in the balance, it is time for Congress to put their partisanship aside and look past the federal debt. Finances can be managed, but lives are much more difficult to repair. The needs of the American people are clear more now than ever, there is no price on a life, not even the debts of the nation.

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