While America Spent $9 Trillion More Than It Taxed, Washington Fell 220,000 Jobs Behind

Between fiscal years 2022 and 2026, the federal government spent nearly $9 trillion more into the national economy than it collected in taxes. In Washington, a severe economic imbalance has produced a different outcome: slower job creation, reduced business formation, weaker economic activity, and money that circulates less productively through the local economy. The result is a clear opportunity loss and continued pressure on state and local budgets.

Jobs: The Clearest Measure of What Was Lost

The imbalance shows up most directly in employment. After a strong rebound in 2021 and 2022, annual nonfarm job growth slowed sharply—from 155,400 jobs in 2022 to 65,200 in 2023, 26,000 in 2024, 17,900 in 2025, and just 13,500 through August 2026.

The longer comparison is more revealing. In the prior decade, Washington added roughly 650,000 jobs, an average of about 65,000 per year. From 2020 through 2025, the state added only about 167,000 jobs. At the previous decade’s pace, it would have added roughly 390,000. The difference is approximately 220,000 to 225,000 jobs that were never created. Even in the post-rebound years of 2023–2025, growth of about 109,000 jobs fell well short of the 195,000 the earlier pace would have produced.

Other factors—national cycles, interest rates, and industry shifts—play a role. But the scale and persistence of the slowdown point to the imbalance as the dominant force. Private investment and business expansion simply occurred at a lower level, and the jobs that would have come with them never appeared. A roughly $30 billion annual shortfall in economic activity is the measurable result.

Slower Business Formation and Reduced Money Velocity

The same pattern has limited the formation of new firms and the expansion of existing ones. Fewer businesses mean fewer local contracts, weaker demand for suppliers, and less spending at restaurants, retailers, and service providers.

When investment and hiring slow, money moves more slowly through the local economy. Each dollar not spent on local suppliers or used to hire workers reduces the velocity of money—the rate at which it circulates and generates additional activity. That slower circulation compounds the opportunity loss and further constrains job growth.

How the Loss Drives Tax Increases and Cost Shifting.

A weaker economy with hundreds of thousands fewer jobs generates less tax revenue than a stronger one would. State and local governments therefore face ongoing shortfalls in funding education, housing, public safety, infrastructure, and other core needs. The pressure shifts onto the remaining tax base through higher rates, broader bases, or new fees on the businesses and households still operating here.

This becomes self-reinforcing. Higher burdens further discourage investment and job creation, which keeps revenue growth constrained and renews the demand for additional increases. The opportunity loss is not only the activity that never appeared; it is also the upward pressure on taxes and the shifting of costs onto those who remain.

A Low Return Overall

Job growth has fallen far below the prior decade’s pace. Business formation is weaker. Money circulates less productively. The tax base expands more slowly. Budgets remain strained, and the response often takes the form of higher taxes or cost shifts rather than broader growth.

Over a period when the federal government injected nearly $9 trillion more into the economy than it taxed, Washington experienced a measurable opportunity loss: roughly $30 billion in economic activity missing each year, approximately 220,000 to 225,000 jobs never created relative to the previous decade’s trajectory, and money that moved more slowly when it was present. The resulting weaker base then drives further tax pressure and cost-shifting. Other factors exist, but the imbalance is the largest force at work.

Recognizing this direct loss—the jobs that never materialized, the slower movement of money, the pressure for higher taxes, and the continued strain on public budgets—is the necessary starting point for restoring stronger returns and broader opportunity.