Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

CBO Estimates FY2019 Federal Budget Deficit Was Just A Hair Under $1 Trillion

  by    0   0

The budget deficit for fiscal year 2019 came in just a hair under $1 trillion according to the Congressional Budget Office estimate.

Even if it does come in under the trillion-dollar mark, it would still rank as biggest deficit since 2012. The budget shortfall has only eclipsed $1 trillion four times, all during the aftermath of the 2008 financial crisis.

According to the CBO estimate, the deficit will come in at $984 billion. That amounts to 4.7 percent of GDP, the highest percentage since 2012. It would be the fourth consecutive year in which the deficit increased as a percentage of GDP. The debt-to-GDP ratio is estimated to have increased a hefty 26 percent over last year.

The Treasury Department will release its official numbers later this month.

The CBO called the federal government’s budget trajectory “unsustainable.”

The pundits in the mainstream media tend to focus on the Trump tax cuts as the cause for the surging deficits, but revenues are actually up. Spending is the real culprit.

Revenue was up 4 percent over fiscal 2018, according to the CBO estimates. Individual and payroll tax receipts increased by $107 billion. Corporate taxes were up $25 billion, a 12 percent increase over last year. Increases in tariff revenue also boosted total government receipts.

Meanwhile, spending was up 8 percent last year, coming in at $4.45 trillion. There were significant increases in outlays for both domestic and military spending. Department of Defense spending rose by $47 billion (8 percent). The Department of Education spent $66 billion more last year. And the net interest on public debt was up by 14 percent.

The spending will continue into the foreseeable future. The bipartisan budget deal signed by President Trump over the summer suspended the borrowing limit for two years and will increase discretionary spending from $1.32 trillion in the current fiscal year to $1.37 trillion in fiscal 2020 and then raises it again to $1.375 trillion the year after that. The deal will allow for an increase in both domestic and military spending.

Unsurprisingly, the national debt is spiraling upward. The national debt increased by $1.2 trillion in fiscal 2019, according to Treasury Department data. The gross national debt currently comes in at a staggering $22.7 trillion and climbing.

To put that into perspective, last February, the national debt topped $22 trillion. When President Trump took office in January 2017, the debt was at $19.95 trillion. That represented a $2.06 trillion increase in the debt in just over two years. The borrowing pace continues to accelerate, with the Treasury set to borrow over three-quarters of a trillion more in just six months. (If you’re wondering how the debt can grow by a larger number than the annual deficit, economist Mark Brandly explains here.)

This kind of “economic stimulus” is a Keynesian dream. Trump claims he’s created the best economy in the history of America, but government spending at levels we would normally see during a recession have juiced the economy. The “great” economy Trump keeps boasting about is actually smoke and mirrors sustained by federal spending and consumers borrowing themselves into record levels of debt.

Republicans like to blame Democrats for big-spending and deficits, but the current spending spree is a bipartisan effort. Virtually nobody in Washington DC is doing anything to rein in this runaway train. It’s is quickly heading down the tracks toward a fiscal disaster.

Get Peter Schiff’s key gold headlines in your inbox every week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

Related Posts

Silver Expected to Shine in 2020

Silver will shine in 2020 with higher prices supported by expanded physical investment and industrial demand. This is the projection of the Silver Institute in its 2020 Market Forecast.

READ MORE →

Subprime Auto Loan Delinquencies at Financial Crisis Levels

Subprime auto loan delinquencies have exploded, taking the overall delinquency rate to Financial Crisis levels. But the economy is supposedly great. What is causing this spike in delinquencies? According to the latest data released by the New York Fed, serious delinquencies (90 days or more past due) surged by 15.5% in the fourth quarter of […]

READ MORE →

Wyoming Considering a State Gold Depository

A bill introduced in the Wyoming House would establish a precious metals bullion depository in the state. It would not only create a safe place to store precious metals; it could also facilitate the everyday use of gold and silver in financial transactions in Wyoming and set the stage to undermine the Federal Reserve’s monopoly […]

READ MORE →

US Government Kicks Off 2020 With Another Big Deficit

The US government posted another massive deficit to start out calendar-year 2020. According to the latest data released by the US Treasury Department, Uncle Sam spent $32.6 billion more than it took in last month. That compares with an $8.7 billion surplus in January 2019. Analysts had projected an $11.5 billion shortfall in January.

READ MORE →

Fed Chair Powell Lets the Truth Slip Out

Every once in a while, the truth slips out of Federal Reserve Chairman Jerome Powell’s mouth. Powell was on Capitol Hill this week addressing Congress. He continued to talk up the economy, but in a moment of honesty, tacitly admitted that the central bank is already engaged in extraordinary monetary policy, and confessed the Fed […]

READ MORE →

Comments are closed.

Call Now