This story was originally published by the WND News Center.
Joe Biden already has repeatedly claimed that he’s reduced the deficit by over a trillion dollars.
The facts are that the federal government’s spending is about the same now as it usually is, maybe more – it’s only lower than last year because of the huge cash handouts by the government because of COVID at that time.
Now economists are saying he’s trying to use the same manipulation again.
This time, he’s promising to account for the cost of his student loan program – his estimate is at about $380 billion but other estimates are much higher – in the 2022 budget.
That will make the 2023 budget appear to be a decline.
According to a Washington Free Beacon report, economists are calling his strategy a reckless budgetary gimmick and a “great error.”
The student loan program – Biden calls it forgiveness but no debt is being forgiven, just transferred from those who borrowed and spent the money to taxpayers – is being added to the “2022 fiscal year budget without any payment mechanism,” the report said.
“My cynical answer is they did it this way so next year they can say the deficit is lower,” economist Marc Goldwein of the Committee for a Responsible Federal Budget told the Free Beacon. “If instead, they put it in the 2023 fiscal year, it would look more obvious that they’re increasing the deficit.”
Biden wants to transfer up to $20,000 of debt from students who got Pell grants to taxpayers, and up to $10,000 from other students to taxpayers.
The program will take years, “but the entire cost will be born in a single fiscal year, a budgetary maneuver likely intended to boost the Biden administration’s misleading talking point that it’s overseeing falling deficits,” the report explained.
“Biden regularly boasts about cutting the federal budget deficit—which increases when the government spends more than it collects in tax revenue—and claims he’s more fiscally responsible than Republicans. The U.S. budget deficit was $2.8 trillion in the 2021 fiscal year and initially just over $1 trillion in the 2022 fiscal year before the added cost of student debt cancellation,” it continued.
“By taking on the cost of student debt cancellation to the 2022 fiscal year budget, Biden can still assert the deficit is falling. Should spending otherwise remain constant in the 2023 fiscal year, the deficit would be just over $1 trillion? But adding the cost of student debt cancellation in the 2023 fiscal year would cause the deficit to balloon to $1.4 trillion. Biden would then be unable to claim that he’s decreasing the deficit,” the report said.
The Free Beacon reported there was no comment from the White House.
But the report said, “No matter where the cost of student debt cancellation is allocated, the move puts further strain on the United States’ fiscal health. Student debt cancellation will increase the country’s total national debt to $31 trillion.”
And, it said, economists of all political persuasions said it will just make Biden’s already family-damaging inflation of about 8 or 9% even higher.
Robert Barro, of Harvard, said, “This is a great error, particularly when added to the cumulative fiscal deficit of 2020-21.”
And it creates a no-win situation for the Federal Reserve, which already has jacked interest rates to levels not seen in decades to try to slow down inflation.
The Free Beacon pointed out, “In the long term, Biden’s spending spree could result in painful economic decisions such as dramatically slashing government programs. As interest rates rise due to inflation, the cost of borrowing has skyrocketed. That means servicing the debt used to pay for programs such as student debt cancellation is more expensive than it would have been pre-pandemic. Rising debt payments can happen quickly: U.S. interest payments on debt totaled $63 billion in August, compared with $34 billion in January because of rising interest rates.”