Increased federal spending, they say, has resulted in growth that is unable to support the burden of servicing the national debt.
"I've been warning Americans about Biden's Inflation Bomb spending agenda from the beginning, and now every American is paying for it," said Sen. Mike Braun (R-Ind.) in a statement to The Epoch Times.
"In Fiscal Year 2021 we threw away $562 billion on nothing but debt service – that's 72% of what we spent on defense that year."
Should stagflation result in increased interest rates – stagflation is high inflation combined with weak economic growth, which is essentially what we are now seeing – then the government of the corporate United States will end up facing a full-blown fiscal crisis.
"Given the comparative certainty of these large federal budget deficits – which will make budget interest costs extraordinarily sensitive to even small interest-rate changes – it would be reckless to commit to decades of permanent new debt in the hope that the interest rate paid on this debt never again reaches 4% or 5%," says Brian Riedl, an economist at the Manhattan Institute think tank.
In the event that economists are wrong about interest rates staying under two percent because of inflation that results in new spending as opposed to growth, then there is no "backup plan" for the government to deal with this ever-ballooning problem.
It turns out that Washington, D.C., is already facing this scenario with interest rate increases that are larger than promised and getting even larger over time. (Related: The United Nations says that widespread social unrest is coming as a result of "war-fueled" food inflation.)
"The resulting inflation, debt service, and rising interest rates have left the U.S. economy in an inflexible position in regards to lowering taxes, which is important to Republicans, and increasing government spending, which is important to Democrats, as both sides begin to dig in their heels, increasing gridlock in Washington," writes John Ransom for The Epoch Times.
"But most importantly, the extra money has failed to produce any economic benefits."
In a statement, Sen. Rick Scott (R-Fla.) claimed that Joe Biden himself has already admitted that his policies are destroying the American economy, which points to a coming recession. Even so, the Resident-in-Chief "digs the economic hole for families deeper and deeper" with no end in sight.
Even though Donald Trump "stimulated" the economy during his tenure, with the Federal Reserve printing trillions of new dollars, Republicans today say that Biden is the one who "overstimulated" the economy and used the Wuhan coronavirus (Covid-19) as an excuse to print more fiat funny money.
"Biden and Pelosi are incompetent," says Ziad Abdelnour, president of Blackhawk Partners, a private equity firm.
"They are doing the exact opposite of what one should do to help the country ... If you want to make money today, just do the exact opposite of what they recommend," he added, claiming that the government under Biden is responsible for inflation and "nothing else."
The Federal Reserve's real-time GDP forecast continues to decline quarter after quarter, with the first quarter of 2022 showing negative growth. The second quarter started with forecasts in the upper range at 4-5 percent GDP growth, but updates to that point to less than two percent growth with a month still remaining for that percentage to decline even further.
"By contrast, the ten-year Treasury, which started the year at a 1.51 percent interest rate yield, has moved up to an interest rate yield of 2.72 percent as a result of the Federal Reserve raising interest rates to combat inflation," Ransom adds.
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Sources for this article include: