In a rare display of bipartisan unity, the Congress and President have found common ground in hammering out a two-year budget agreement that suspends the debt ceiling until July 2021 while eliminating budget caps enacted in 2021.
Villanova Economist David Fiorenza has serious concerns about the effect of the proposed agreement on the country’s exploding debt and Congress’s refusal to slow the rate of growth of expenses.
“There is no fiscal austerity in this budget as the budget will be presented to the President, with an approximate increase of $320 billion in spending. Most economists are not as concerned about the debt as I am because they believe our country can make good on any debt that needs to be paid back,” Fiorenza said.
“I believe the debt will hinder growth for the younger citizens of our country. We cannot continue to increase the debt. It is not prudent,” he added.
A true budget, according to Fiorenza, should be presented that, at the very least, reduces the rate of growth of expenses. The additional spending in the proposed budget satisfies both sides of the aisle, giving Republicans increases for national defense, and discretionary spending for the Democrats.
And, even though the Federal government is collecting more in tariff revenue and decreasing our trade deficit with China, it does not compare to the increase in debt of this new budget, Fiorenza pointed out.
Particularly worrisome, he said, is that U.S. debt is exceeding our Gross Domestic Prouct (GDP) by approximately six per cent. “In theory, GDP should be exceeding a country's debt, which has not been seen since the Clinton Administration, he concluded.”
To speak with Professor Fiorenza, email firstname.lastname@example.org or call 610-519-5152.
David Fiorenza Assistant Professor of Practice in Economics | Villanova School of Business
David Fiorenza is an expert in local economic impact, the economics of the hospitality industry and state budgetary negotiations