Biden administration may have done irreparable damage to US economy

The Pentagon’s latest financial audit is in, and it’s a complete disaster. Again. For the seventh year running, the Department of Defense (DoD) failed to account for its budget, this time admitting it cannot explain what happened to $824 billion.

The DoD’s fiscal 2024 audit was released late Friday night, where auditors examined $4.1 trillion in assets and $4.3 trillion in liabilities, but their findings make it clear: the books are a mess. Nine entities within the DoD managed to scrape by with “clean” audit opinions, meaning their financials are accurate and accounted for.

One entity earned a “qualified” opinion, signifying some errors that didn’t completely ruin the books. The rest? Fifteen entities failed outright, earning disclaimers because the financial statements were so bad, that auditors couldn’t even determine if they were right or wrong. 

Three major DoD entities—the Marine Corps, the Defense Logistics Agency’s National Defense Stockpile Transaction Fund, and even the DoD Office of Inspector General—haven’t even completed their audits yet. Given The Pentagon’s track record, don’t hold your breath for good news.

Taxpayers left holding the bag

Americans are footing the bill for this incompetence. The Pentagon’s sloppy financial management means billions of dollars are essentially untraceable, leading to waste on an unimaginable scale. For instance, an estimated $220 billion worth of spare parts is either lost, misplaced, or completely untracked.

It appears the Department of Defense is hemorrhaging taxpayer dollars on parts it can’t even locate, let alone use. The consequences go beyond missing parts. Lawmakers are likely to push for an even bigger defense budget, citing these losses as justification.

Defense spending is already nearing $1 trillion annually and could easily surpass that number by 2027. And where does that money come from? Education, Healthcare, or Infrastructure. The very things Americans rely on.

Amusingly enough, The Pentagon has reportedly invested over $4 billion in recent years to improve financial transparency and accounting practices.

Bidenomics was a flop – to the people at least

While the Pentagon’s audit failures are horrifying, they’re just one chapter in a larger story of economic dysfunction. Under Biden’s leadership, Americans have completely lost faith in the economy. A CBS News poll found that 60% of Americans think the economy is either “fairly bad” or “very bad.”

Gallup reports that more than half of Americans feel worse off now than they did four years ago.  The disconnect between economic data and public sentiment is enormous. Official numbers show GDP growth of 2.8% in the third quarter of 2024, with consumer spending rising by 3.7%.

But for ordinary Americans, those numbers don’t mean squat when grocery bills and rent payments keep climbing. Inflation may have cooled from its peak, but its effects are still felt every day.

Biden’s approval rating continues tanking. Only 33% of Americans approve of how he’s handling his job, with the economy being the main reason for his unpopularity. The partisan divide here is sharp: 90% of conservatives think the economy is terrible, while only 30% of liberals agree.

What’s more, people without college degrees—essentially the backbone of America’s workforce—are more likely to say the economy sucks. They’re not wrong.

Blockchain could be the solution Biden never wanted

Crypto nerds believe that the Pentagon’s accounting failures could have been avoided if it adopted blockchain technology. Blockchain, known for its immutable ledger and real-time tracking capabilities, could completely overhaul the way the DoD handles its finances.

Imagine a system where every spare part, every transaction, and every contract is recorded on a blockchain. There would be no misplaced assets because everything would be tracked in real-time. Smart contracts could ensure compliance automatically, eliminating shady deals and cutting out middlemen.

Proponents also point to the transparency that blockchain provides. It’s harder to hide financial mismanagement when every transaction has a clear, traceable audit trail. For an organization as bloated and opaque as the Pentagon, this could be a game changer.

Decentralized systems could also protect data from being lost, damaged, or manipulated—a huge issue given the Pentagon’s reliance on contractors for critical operations.

But there’s a catch. Implementing blockchain would require buy-in from the very people who benefit from the current broken system. Do you really think defense contractors want to work in a world where every dollar is tracked and every asset is accounted for? Fat chance.

Meanwhile, America’s GDP growth in the third quarter of 2024 reached 2.8%, slightly down from 3% in the second quarter but still showing solid activity.

Projections suggest annual growth will average 2.7% for 2024, with a noticeable slowdown expected in 2025 to around 1.8% or 1.7%. Consumer spending remains a key driver of this growth, jumping 3.7% in the third quarter—the fastest rate since early 2023.

But, inflation and wage pressures create challenges. Nominal wages have risen, but inflation-adjusted earnings struggle to keep up, putting a squeeze on purchasing power despite strong labor market numbers.