In 2002, the year following the 9/11 terrorism attacks, the federal government gave away a huge amount of money to almost every municipality and county, no matter how remote or sparsely populated, to be used for counterterrorism measures. There was little due diligence in that first post 9/11 year as to where the money was actually needed most and where counterterrorism measures would be most cost effective. To date over $2.8 trillion has been spent on anti-terrorism measures.
Now we are seeing the same “knee-jerk” reaction to COVID-19. The Committee for a Responsible Federal Budget (CRFB) is a nonpartisan, non-profit organization committed to educating the public on issues with significant fiscal policy impact. They estimate that Congress has allocated $4 trillion of gross fiscal support in COVID-19 relief, of which at least $2.7 trillion (over two-thirds) has been committed or disbursed as of January 22, 2021.
Let’s take a look at just the money going to COVID-19 education and prevention in our schools. The Cato Institute, a public policy research organization, reports that since March last year, the federal government had already enacted two COVID relief bills affecting elementary and secondary education with another huge bill on the way. The bills provide nearly an additional $212 billion for K-12 schools.
The education funds far exceed the need. The CDC estimated in December that the cost of providing full anti‐COVID-19 measures in schools, including materials and staff, is about $442 per student or roughly one-ninth of what public schools receive from all relief efforts. In other words, schools are getting approximately nine times as much money they actually need. Think they might give any of that surplus back? Guess again.
CNBC reported it is expected that the U.S. will spend $4 billion on international COVID-19 vaccination efforts. Not on vaccinating U.S. citizens but for vaccinating the rest of the world; but all those foreign countries love the U.S. don’t they?
Forbes reports that the last time the U.S. had a balanced budget was in 1835. Since then the total debt is now in excess of $28 trillion. Spending in 2020 represented an increase of more than $2 trillion from 2019, a 47 percent increase, but at the same time, government revenue was down. The increased government spending combined with declining revenue resulted in more than $3.1 trillion added to the national debt.
The United States is not alone in this crisis. Countries using lockdowns to prevent the spread of the disease have irreparably harmed smaller businesses in particular. According to the International Monetary Fund (IMF) the outlook is dire and they expect global economic activity to decline on a scale not seen since the Great Depression. With the pandemic now continuing into 2021, even countries with advanced economies like the U.S. may see economic growth fall by as much as 14 percent.
I predict that it is not a matter of “if” but “when” as a direct result of overall runaway spending and ignoring the monstrous budget deficit, the United States economy will crash on an unprecedented scale. The 1929 stock market crash will look like a minor market correction in comparison. Inflation will soar to the point where the U.S. dollar will be almost (or even) completely worthless. Failed economies have brought about the destruction of other powerful nations and empires throughout history. The United States is not immune to suffering the same fate.
Our elected officials need to make some hard and unpopular decisions if the deficit is to be brought under control. Unfortunately most can see only as far ahead as their next election. The public must also be willing to endure some inconveniences and hardships if we are to avoid this looming economic disaster. It is time to put a stop to “kicking the can down the road.”
Failing that, will reckless COVID-19 spending be the proverbial “straw that breaks the camel’s back”? Time will tell.
David Dallas is a resident of the Village of Bradford.