On April 10th, 2023, President Joe Biden signed a bill officially ending the three-year national emergency for Covid-19. The White House intends to continue the “public health emergency” until May 11th. Perhaps then, we can consider the pandemic officially over.
For too many in Washington, the perpetuation of this once very real crisis had the motivation of John Belushi’s character Bluto in the 1970’s film “Animal House” with his famous lines of, “Over? Did you say ‘over’? Nothing is over until we decide it is! Was it over when the German’s bombed Pearl Harbor?…” This is of course fitting as the epilogue slides at the movie’s end noted that John “Bluto” Blutarsky had become a U.S. Senator.
Three years later the human costs of the pandemic are now very real statistics, with very real and personal meanings to most of us. The focus of this piece, however, is the economic consequences of where we are, and the financial challenges we as a nation must face going forward.
Federal Government expenditures for fiscal year 2019, the year before the pandemic began, totaled just over $4.4 trillion. The emergency spending that coincided with the Spring 2020 economic shutdown saw spending swell to $6.6 trillion, increasing to $7.2 trillion for FY 2021. 2022 saw federal spending reduced to $6.4 trillion, with the CBO estimating current year spending of $6.2 trillion.
The Federal Government will spend about as much this year as it did during the initial response to Covid, which included the massive healthcare mobilization and stimulus relief programs for individuals and businesses. This represents a 40% increase over pre-Covid expenses. For those who wanted to increase the size and cost of government, this is a crisis that did not go to waste.
The number of fiscal problems here grow deeper the more we look into what lies ahead of us. With interest rates continuing to increase, deficit spending creates even larger deficits. The Federal Reserve…
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