Our government never really needs a reason to spend our tax dollars—it does that on autopilot, spending about $218 million every hour.

But as we enter into another election season, we should expect to see a lot more government spending, which will inevitably drive further inflation. It’s important to note that while the spending will happen now, the true financial impact will take months or even years to show up.

This happens during most election seasons, but I believe it will be far worse this year because our economy is hanging on by a thread, and the Biden administration’s approval rating is hovering at historic lows never before seen. Desperation will lead to a variety of vote-buying campaigns, thinly veiled as necessary government spending.

It’s not hypothetical because this administration has already demonstrated a history of that kind of behavior. For example, despite being declared unconstitutional, the administration moved forward with its plan to “cancel” student loan debt. Since the ruling, Biden has spent over $620 billion on this program. There’s also the new proposed mortgage stimulus, funding the wars in Ukraine and Gaza, and the new IRS stimulus, to name just a few new programs designed to appease voters.

They already have a history of doing this, several newer spending programs are already in place, and many more will likely follow.

The problem here is multifaceted.

The first is that it’s a matter of ethics. I don’t think anyone can honestly claim that it’s acceptable to hand out cash in exchange for votes, but that’s essentially what happens every election cycle. Think about it like this: when politicians pour tax dollars into a program, they try to earn favor from whoever that program serves. That’s vote buying without explicitly calling it that. And the more of this we see, the more “normalized” it becomes, so more politicians feel comfortable doing it, too.

While this does inject money into the economy, creating a short-term benefit for some people, it also adds to our national debt, which is already at peak levels. Our debt is so high now that the interest payment exceeds our defense spending. America is already in a precarious position, and each reckless spending program we add to the budget pushes us closer to the edge.

Right now, our nation is a lot like that friend we’ve all had, who would borrow from one credit card to pay another, and before long, could no longer keep up with minimum payments.

That ties up money in our budget that could be used in more productive ways, but more worrying is the fact that it reduces our ability. as a nation, to borrow. In a nutshell, it significantly hampers our financial resiliency.

And last, but certainly not least, is inflation. These spending programs erode the purchasing power of our dollar by flooding the market and diluting the value of the currency we currently have in circulation. To put this all in context, over 80% of the currency we have in circulation today has been printed since 2020, and the purchasing power of our money has plunged by 25% during that same time period, and 92% since 1933.

While the pundits on television today seem committed to convincing us the economy is great and inflation isn’t really a thing, the reality is that our economy is deeply fractured and inflation is rampant. All you have to do is look at the cost of your own necessities, like groceries, gas, and clothing. And this inflation was created largely by government spending.

So, while we face a serious problem of rapidly growing debt fueled by these vote-buying policies, we face an even bigger problem when their inflationary impact kicks in.

This pushes us towards a 1970s-style, stagflationary economy that will take decades to recover.

The irony of the situation is that the handouts cause the problems, and then our politicians propose more handouts to “solve” the problems they caused in the first place. More government spending means more inflation, which means everything becomes more expensive, and your retirement account becomes less valuable. It quickly becomes a death spiral dragging our economy to the bottom of the swamp.

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Dr. David Phelps created Freedom Founders to help its members achieve the freedom they wanted in their lives by building the necessary financial foundation. He is a noted financial expert who is regularly cited by the media, and recently helped the FL Dept. of Education develop its new financial literacy curriculum.