EDITORIAL: Bidenomics? Agency warns of ‘fiscal deterioration’

After a healthy run throughout much of the year, markets have retreated over the past few days in response to a second agency downgrading America’s credit rating. Do our representatives in Washington care?

On Tuesday, Fitch Ratings lowered the country’s credit worthiness from AAA to AA+. The agency cited the nation’s growing debt burden and an “expected fiscal deterioration” over the next three years.

Will this news work its way into President Joe Biden’s desperate effort to drum up voter support for “Bidenomics”? Don’t bet on it.

Some analysts said they understood the move. “This is about a fundamental mismatch between our spending growth and our revenue capabilities,” Douglas Holtz-Eakin, former director of the Congressional Budget Office, told The Associated Press.

But at what point do the president and Congress realize that we cannot sustain the fiscal path we are currently traveling? How many warnings must sound or red flags wave? The national debt is now more than $32 trillion — for perspective, in fiscal 2000, just 23 years ago, it was $5.6 trillion.

Yet Mr. Biden and congressional Democrats — who passed trillions in inflation-causing new spending — prefer to wallow in the red ink. Deficits are expected to remain in excess of $1 trillion for the foreseeable future. Under the president’s fiscal 2023 spending proposal, the debt would increase $16 trillion over 10 years, pushing almost $50 trillion.

To be fair, Washington has a bipartisan spending problem. The debt also soared under GOP Presidents George W. Bush and Donald Trump. A dwindling number of Republicans in Congress carry the banner of fiscal responsibility these days. But it’s high time somebody began listening to them.

Simply raising taxes would be like giving a raging alcoholic on a bender the keys to a big-box liquor store. Notice that Mr. Holtz-Eakin said that spending growth doesn’t align with “revenue capabilities.” Tax collections in Washington have never been healthier, but Congress can’t restrain its insatiable urge to spend other people’s money.

If serious steps aren’t taken to change course, “it almost certainly means paying more to borrow,” The Wall Street Journal noted this week. “That rising risk-free rate will crowd out private investment and dent the value of stocks, all things being equal.” The result will be slower growth — if any — and stagnation as debt payments eat up outlays.

Sen. Rand Paul, a Kentucky Republican, faced ridicule in 2020 for proposing that the nation reach a balanced budget by cutting one penny out of every $1 in federal spending. The price has skyrocketed since, thanks to Bidenomics. If those in Congress continue to ignore the obvious, they may soon regret they didn’t give Sen. Paul’s plan for fiscal sanity a fair hearing.