After a prolonged period of significant spending, it seems there’s a growing concern among Democrats about deficits and national debt. This is somewhat puzzling, as their actions indicate that their main focus isn’t really on reducing these financial issues but rather on maintaining high levels of spending and increasing taxes to cover it.
Democrats often refer to the anticipated tax rate increase in 2026, choosing this future date as their point of reference instead of today’s rates, which were lowered by the Tax Cuts and Jobs Act in 2017. They argue that if tax rates remain at current levels, it equates to an increase in deficits and debt.
From their viewpoint, the expected tax rate rise for the average American in 2026 is seen as the same as not changing rates at all. This argument seems to sidestep the actual cuts and reflects a sort of flexibility in their fiscal planning.
Interestingly, the baselines they don’t discuss are part of what has put the country into its current debt situation, something they’ve largely contributed to over the last four years. Essentially, the Democrats and the Biden administration used the Covid crisis as a benchmark for spending, keeping it elevated ever since.
According to the Congressional Budget Office, set in 2019, government spending was about $4.4 trillion, marking an 8% increase from the previous year. When Covid hit in 2020, spending surged by 47% to reach $6.5 trillion.
Under Biden, spending was $6.8 trillion in 2021, $6.2 trillion in 2022, $6.1 trillion in 2023, and $6.7 trillion in 2024.
This level of crisis-induced spending resulted in the administration driving closer to $7.5 trillion, even in years when the crisis was not the main factor affecting expenditure.
My calculations suggest that when comparing actual spending from 2019 to the crisis era, the additional spending reaches about $8.2 trillion, meaning that spending in 2024 was 52% greater than in 2019.
Even when adjusting 2019 spending for inflation—which has seen the highest levels in 40 years—Biden’s spending still eclipsed what might have been expected, surpassing $6 trillion by a fair margin.
In the first year of Biden’s term, after adjusting 2019 figures for inflation, federal spending exceeded those adjusted levels.
The root of the issue is clear: it’s the expenses, not tax revenue, that are creating problems.
Tax revenue actually increased in 2019 due to fee adjustments from 2018. Despite the challenges of 2020, revenues rose again in 2021, 2022, and 2024.
However, in 2023, a decline in revenues occurred, attributed to slower economic growth and the expiration of Covid-related tax provisions.
Examining revenue, expenditures, and GDP highlights that excessive spending is the real issue. A recent report from the Parliamentary Budget Bureau noted that 2024 revenue was just under 0.1% away from its 30-year average, whereas spending exceeded that average by 2.3 percentage points.
When looking at the actual deficit and expenditures, the deficit in 2024 was 4.1% of GDP—slightly above the average but significantly lower than what it might seem.
If we account for inflation in actual 2019 spending over the past five years, my estimate for 2024 drops to about $5.4 trillion, which would suggest 18.7% of GDP instead of the 23.4% Biden’s figures indicate.
From this inflated 2024 spending level, the deficit as a share of GDP is less than half of the Parliamentary Budget Office’s average, sitting at just 1.6%.
Though spending surged during Covid, one would expect it to revert to pre-crisis levels afterward—at least adjusted for inflation—but that hasn’t happened in the subsequent four years.
The Democrats’ heavy spending during the crisis has led to significant deficits and debt, and now they seek to impose tax increases, masquerading as a solution.
I suppose it’s time to revisit a slogan from the Democrats’ 1992 campaign: “It’s spending, stupid.”
