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

Federal Government Runs Up Sixth-Largest Single-Year Debt Increase in US History

  by    0   0

Sept. 30 marked the end of the federal government’s 2018 budget year. According to data released by the US Treasury Department, the federal debt grew by nearly $1.3 trillion in fiscal 2018 – $1,271,158,167,126.72 to be exact. It was the sixth-largest fiscal-year debt increase in the history of the United States.

So much for that Republican Party fiscal responsibility.

The total federal debt currently stands at $21.5 trillion.

For the eighth time in the last 11 years, the federal debt has grown by more than $1 trillion. As you can see from the chart, the debt continues to spiral upward, no matter which political party controls Congress and the White House.

The largest increase in the federal debt occurred in fiscal 2009 (Oct. 2008-Sept. 2009) at the height of the financial crisis. Debt tends to accumulate faster during economic downturns. The fact that the Trump administration managed to run up near-record debt during what is supposed to be an economic boom should cause a great deal of concern.

Republican tax cuts without any corresponding spending cuts exacerbated the debt problem. It’s not that tax cuts in and of themselves are bad. But without any accompanying cuts in spending, they are exacerbating the debt problem. As Peter Schiff has put it, we got tax relief without any government relief.

In August, the US government set a single month spending record, burning through $433.3 billion and running up a monthly deficit of $214 billion. Federal government spending came in 30% higher than August 2017 and ranked as the highest monthly outlay on record.

The spending pace looks to continue. Pres. Trump recently signed an $853 billion spending bill. The Republicans still haven’t passed an actual budget. The most recent spending bill funds the departments of Defense, Education, Labor and Health and Human Services for one year. It also provides money for agencies not covered by this legislation or by a previous spending bill through Dec. 7. The piecemeal approach to spending makes it difficult to track exactly how much the federal government is spending.

CNS news calculated that the federal government ran up a debt equaling approximately $8,172 per American worker. The total federal debt comes to about $138,330 for every person in this country who works.

It’s easy to read all of these numbers and think, ‘ho-hum who cares.’ After all, we’ve been talking about runaway spending, budget deficits and federal debt for years. Nothing has happened. But remember, we’ve also been in an artificially low interest rate environment for years. The federal government continues to pile up debt and interest rates are climbing. The interest payment on the debt hit an all-time high of $538 billion in Q2 2018.

Politicians in Washington have created a vicious cycle of skyrocketing debt and borrowing that is only likely to accelerate, and seem completely unwilling to do anything about it.

Many GOP pundits claim economic growth thanks to the tax cuts will solve the problem. But this traditional GOP talking point falls flat. Again – we got tax relief with no government relief.

As we’ve reported previously, high levels of debt are cancer on economic growth. Several studies have estimated that economic growth slows by about 30% when the debt to GDP ratio rises about 90%. Most analysts say the US economy is already in the 105% range. Most economists believe the tax cuts have boosted the economy, but the boost will likely be short-lived unless Uncle Sam gets his spending problem under control.

Get Peter Schiff’s most important Gold headlines once per 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

Government Policy Changes Should Boost Indian Gold Market

Some policy shifts recently announced by the Indian government in its Union Budget will likely have a positive impact on the country’s gold market. India ranks as the second-largest gold-consuming country in the world, second only behind China. The three key policy changes that will likely affect the gold market are:

READ MORE →

Fed Expands Record Holdings of US Debt

The Federal Reserve expanded its record holdings of US Treasuries in the fourth quarter of 2020 as it continued monetizing the massive federal debt. The Federal Reserve added another $253 billion to its Treasury holdings in Q4 according to the Fed’s Treasury International Capital data released on Feb. 16. That brought the central bank’s US […]

READ MORE →

US Treasury Department Set to Unleash Another Tidal Wave of Inflation

The Federal Reserve increased the money supply at a record rate in 2020. And a move recently announced by the US Treasury Department will mean even more money flooding into the marketplace. In other words, another tidal wave of inflation.

READ MORE →

The Fed Just Keeps Getting More and More Dovish

Is Jerome Powell the most dovish Fed chair yet? Peter Schiff said he wasn’t when he first took the position and was raising interest rates. But he is now. The minutes from the January FOMC meeting released last week bear this out. “We’re all doves now. That is the problem, the Fed gets progressively more […]

READ MORE →

Kansas Bill Would Make Gold and Silver Legal Tender in the State

A bill introduced in the Kansas House would recognize gold and silver specie as legal tender and repeal all taxes levied on it. The legislation would pave the way for Kansans to use gold and silver in everyday transactions, a foundational step for the people to undermine the Federal Reserve’s monopoly on money.

READ MORE →

Comments are closed.

Call Now