Spending, Not Revenue, Drives America's Deficit, and Entitlement Reform Is Needed Now to Avoid a Fiscal Crisis
Source: https://www.facebook.com/americanspectator/. "$2 Trillion — and No Excuse | The American Spectator | USA News and Politics." October 15, 2026. spectator.org
The Gist
The federal government is running huge deficits even in good times, and the problem is that spending is growing twice as fast as revenue, mostly from entitlements and interest. Raising taxes isn't the answer, and tariffs never could have closed the gap. Congress should reform Social Security, Medicare, and Medicaid now, or face either inflation or a sudden bond-market crisis like the one France is headed toward.
Conclusion
Congress should cut the growth of spending, especially on Social Security, Medicare, and Medicaid, rather than raise revenue, because otherwise the U.S. will face either persistent inflation or a sudden, severe fiscal crisis.
Premises
- FY2026 ended with a deficit of nearly $2 trillion, the largest outside the pandemic years, even though there is no recession or emergency.
- The deficit stems from spending, not a revenue shortfall: revenue rose 3% to $5.4 trillion while spending rose 6% to $7.4 trillion, and even the $130 billion in lost tariff revenue would cover less than a tenth of the gap.
- The fastest-growing items are entitlements (up 7%) and interest on the debt (up 11%, over $1.1 trillion), so debt is already compounding the problem.
- France, long cited as proof that big government works, now faces a debt crisis at 120% of GDP. The U.S. is on track to reach that level in a few years, and anti-growth forces like those in France are gaining popularity here.
- High debt raises interest rates for everyone, which drags on growth and wages, so controlling debt is part of an affordability agenda.
- Tax increases are not viable because the payroll tax has already risen from 2% to 12.4% and is the most burdensome tax for many Americans.
- Structural reforms exist that would restrain spending: index the Social Security retirement age to life expectancy, move to a flat benefit, convert Medicare to premium support, and use per-capita caps and state-level incentives for Medicaid and SNAP.
Assumptions
- The current deficit trend is structural and will persist rather than being a temporary fluctuation.
- Spending restraint is preferable to revenue increases as the way to close the gap.
- Bond markets will at some point punish U.S. fiscal irresponsibility, as they would in France.
- The U.S. is comparable enough to France that France's trajectory is a meaningful warning.
- The proposed reforms would meaningfully reduce spending without causing greater harm to beneficiaries or the economy.
- Market-based competition and state-level cost-sharing will improve efficiency in Medicare and Medicaid.
- Inflation and a sudden fiscal crisis are the only alternatives if no reform is made.