Giving beyond one’s means Part II

Written By dKay in Maine

In my previous article, “Giving beyond one’s means,” I discussed how the Bible encourages generosity while emphasizing balance and wisdom in giving on an individual level. Believers are encouraged to give according to what they have, not what they don’t have. They have to ensure they are not neglecting their own well-being or the needs of their family. A question I left unanswered, though, was:

What does “Spending beyond one’s means” look like on a governmental level?

In the U.S., federal spending is divided between mandatory and discretionary spending. Mandatory programs like Social Security and Medicare account for a large portion (nearly two-thirds) of the budget. These programs are legally required, making it challenging to cut costs without changing the laws governing them. On the discretionary side, spending is debated annually, and funds are allocated for defense, education, transportation, and more. In 2024, federal outlays are significant, and balancing these with revenue continues to be a challenge, reflecting the broader debate about fiscal sustainability.

According to the US Treasury’s Fiscal Data website, the U.S. government spent $6.29 trillion between October 2023 and August 2024, an increase of 14.36% compared to the same period in the previous year (Oct 2022 – Aug 2023), 5.50 trillion. In the fiscal year (FY) 2023, the government spent $6.13 trillion, more than it collected in revenue, resulting in a deficit of approximately $1.7 trillion, marking a significant increase compared to previous years.

The graphic below shows the various revenue (Receipts) and expanses (Outlays) for the FY 2024 through August 2024. Please note that the FY ends on September 30.

As the graphic above shows, FY 2024's deficit was $1.9 trillion as of August 2024, including $1.85 trillion “on-budget” and $43.6 billion “off-budget” as per the Monthly Treasury Statement for FY 2024 through August 31, 2024, which leads me to the following question.

How can a deficit be “on-budget”

In the context of the U.S. government budget, "on-budget" refers to the portion of the federal budget that includes all regular government operations and most federal revenues and expenditures, excluding certain trust funds, like the Social Security Trust Fund. This budget is proposed by the President and approved by Congress. It outlines expected revenues and expenditures for the upcoming fiscal year, including discretionary spending, which Congress must approve annually, and mandatory spending, set by existing laws. Upon approval by Congress, the government has the authority to spend and collect revenues accordingly.

When "on-budget" expenditures exceed revenues, a budget deficit occurs, meaning the government spends more than it collects in revenue for that fiscal year. The government can finance the deficit through borrowing, which adds to the national debt.

In summary, the government can be "on-budget" while still having a deficit; it just reflects the financial health and fiscal policies at that time and the government’s financial priorities and policy decisions for that fiscal year.

At this point, it’s also interesting to look at the data for the Fiscal Year 2019, for the same period, September 2018 through August 2019.

Based on the data from the U.S. Treasury, revenue in 2024 was ~42.2% higher than in 2019, spending was ~51.3% higher, and the deficit was ~77.8% higher. I highly recommend looking at the US Treasury’s treasure trove of data to understand where the revenue comes from and where the money goes (at least as far as ‘we the people’ can follow it). You can find direct links to some of the monthly reports and the data sets in the Resources section at the bottom of this page.

To me and many others, it’s mind-boggling how we can have a $1.9 trillion deficit for the fiscal year 2024 with one more month to go and a total national debt of $35 trillion.

An image that shows the US Debt as of September 21, 2024, stating a debt of 35,327,646,622,839 US dollar.

US Debt as of September 21, 2024

Knowing the numbers above, let me return to the statement that inspired me to write: “Giving beyond one’s means.”

“You’re not a Christian if you don’t want immigrants in your country/the country you reside in!”

From what I’ve seen and heard, not many Americans complain about immigrants who lawfully come to the United States, for example, on a work visa, which means that the alien has a job and will pay taxes and any expenses themselves. However, the high number of immigrants let into the country without proper vetting and the cultural clashes that occur when high numbers of immigrants with a completely different cultural background and often an inability to speak English come into the country, state, city, or town lead to complaints. Additional complaints focus on the fact that the government spends money on unvetted immigrants that could be spent on its citizens, for example, homeless citizens. This raises the following question.

How much does illegal immigration cost the U.S.?

Finding data on how much illegal immigration costs is tricky, as data on this topic is not readily available, and government studies are often outdated. For example, government studies, such as "Effects of Unauthorized Immigration on the Actuarial Status of the Social Security Trust Funds" from the Social Security Administration, date back to 2013, before the recent peak in border crossings. However, in a Budget Committee hearing on May 12, 2024, on “The Cost of the Border Crisis,” a witness from the Federation for American Immigration Reform (FAIR) shared their findings. The organization’s most recent fiscal cost study showed that illegal aliens and their U.S.-born children impose a net annual cost of $150.6 billion on American taxpayers as of the beginning of 2023. Since the last study from 2017, the cost has risen by nearly $35 billion, a ~30% increase.

That said, I strongly advise everyone to do their own research, as I could not verify the data due to the limited access to the data needed, and some sources, like the CATO Institute, state that FAIR's study is flawed and overestimated data in 2017. However, an interesting statement on CATO's blog calls out that "the increase in housing values created by illegal immigrants results in $12.2 billion in additional tax revenue," meaning that property taxes went up, a cost someone has to shoulder. If you go back to my previous article, you can see that the average American doesn't have much money left to pay increased property taxes after paying for core necessities.   

But sadly, increasing taxes is one of the ways the government can use to offset the fact that our government spends more money than it makes.

Where does the money come from?

There are a few key options for funding the U.S. government’s operations, and none of them is in the interest of U.S. citizens.

  • Raising Revenue (Taxes)
    The government can increase taxes to raise additional revenue. Corporate and individual taxes, tariffs, and excise taxes are ways the government can generate more revenue, but tax changes usually require Congressional approval and can take time to implement. Raising taxes is currently a hot topic for folks in Maine as we’re seeing percentage increases in property taxes in the two-digit realm.

  • Borrowing by Issuing Debt
    The government borrows money by selling Treasury securities to domestic and foreign investors. These securities are essentially IOUs, in which the government promises to repay the borrowed amount with interest at a future date. However, this borrowing adds to the national debt, the total amount of money the government owes from past borrowing. We already saw where the debt is at – a staggering 35+ trillion US dollars as of the day I’m writing this article. There is a limit (debt ceiling) on how much the government can borrow, but Congress often raises or suspends this limit to avoid defaulting on obligations.

  • Printing More Money (Monetary Policy)
    The Federal Reserve could print more money but typically avoids it as it risks inflation. Inflation erodes the currency's value and can destabilize the economy, so this is considered a last-resort measure. However, during the COVID-19 pandemic in 2020-2021, the Federal Reserve engaged in large-scale money printing, also known as Quantitative Easing (QE), an unprecedented response to stabilize the economy during the pandemic-induced recession. The Fed purchased trillions of dollars in Treasure and mortgage-backed securities to inject liquidity into the financial system. While inflation remained low initially, by late 2021, it had surged to levels not seen in decades, with Consumer Price Index (CPI) inflation reaching 7% by December 2021 and peaking at around 9% in mid-2022.

  • Monetary Policy via Federal Reserve
    The Federal Reserve, although independent, plays a role in controlling inflation and influencing borrowing costs by setting interest rates. It doesn’t directly fund government spending but can influence the broader economy by making borrowing cheaper or more expensive for both the government and consumers. After cutting interest rates three times in 2019 and printing money during the pandemic, the Fed increased interest rates seven times between March and December 2022. While inflation peaked at around 9% in June 2022, it began to slow as rate hikes took effect. Throughout 2023, the Fed continued raising rates, reaching around 5.25% by mid-2023 to combat inflation, which gradually declined. On September 18, 2024, the Federal cut interest rates by 50 basis points.

  • Budget Cuts and Spending Reallocation
    If additional borrowing or raising taxes isn’t possible, the government can also try to reduce expenditures by making budget cuts or reallocating funds from other programs.

So, going back to the topic “Spending beyond one’s means.” It’s precisely what the government does. No matter the approach to increasing its revenue, it will always impact its citizens. And this is why even Christians say that mass immigration has to stop, as it puts a burden on those who are willing to give but are asked to give more than they have.

Please let me know if you’re interested in learning about government spending in Germany and the UK, and I will add it to my list of future content.

Resources (links open in new tab):

dKay in Maine
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