America Loosens the Reins on Government Spending

The U.S. budget agreement is following a dangerous pattern: Federal expenditures are rising quickly, but reciprocal funding takes a long time.

In Washington, the budget proposal is following the usual pattern, and it’s a dangerous pattern. In the short term, Democrats and Republicans are approving higher government spending, while the necessary revenue — to be raised through higher taxes and budget cuts — has been pushed to the back burner.

Whether the reduction of debt that was promised will come to pass remains anyone’s guess. At about $20 billion over ten years, it’s a ridiculously small sum anyway and won’t make a dent. All that the agreement is really good for is a symbol of how all fiscal reasoning has come to an end in a politically violent, feuding Washington.

The biggest risk is that the two parties will ultimately soften the automatic cuts in pursuit of a compromise. In Congress, such sweeping cuts are by definition very unpopular. Since 2011, however, they’ve at least been quite successful in slowing the descent into becoming a debtor nation. Now the parties are casting off these reins, and for the time being it’s temporary. However, setting such a precedent doesn’t bode well for future fiscal agreements.