CPI came in even hotter than expected signaling rising inflation. The US government is running a massive record budget deficit. But we’re told these things aren’t a problem. Budget deficits don’t really matter. Inflation is transitory. But how can we be so sure? On this episode of the Friday Gold Wrap podcast, host Mike Maharrey talks about it.
Through the first six months of fiscal 2021, the US government ran a record $1.7 trillion budget deficit. Federal Reserve Chairman Jerome Powell said this is sustainable – for now.
During a webinar sponsored by the Economic Club of Washington DC, Powell said the economy can handle the current debt load. But he did warn that the long-term trajectory of the US budget is unsustainable.
The US government ran a budget deficit of $659.59 billion in March, pushing the budget shortfall to a record $1.7 trillion through the first half of fiscal 2021, according to the Treasury Department’s Monthy Treasury Statement.
The March budget deficit ranks as the third biggest monthly shortfall in US history, driving Uncle Sam the biggest half-year deficit ever.
Congress recently passed coronavirus stimulus 3.0, adding another $1.9 trillion in federal spending to the already massive fiscal 2021 budget deficit. That brings total spending related to COVID-19 to somewhere in the neighborhood of $5 trillion.
Meanwhile, the national debt has skyrocketed past $28 trillion. The US government has added $5 trillion to the debt in less than 18 months.
It might be tempting to blame all of this spending and the bloated government that comes with it on the coronavirus, but the trajectory of borrowing and spending was heading skyward even before the pandemic. In fact, the US government has been growing in size and scope for over 40 years, even as progressives bemoaned it as an era of government atrophy.
Just five months into fiscal 2021, the US government has already run a budget deficit of over $1 trillion.
In a year of massive deficits, the US federal government charted its biggest monthly shortfall of fiscal year 2021 in February.
According to the Monthly Treasury Statement, the February deficit came in at $310.92 billion, pushing the fiscal 2021 budget shortfall to $1.05 trillion.
On March 1, the US national debt eclipsed $28 trillion with no end to the borrowing and spending in sight.
It was just last fall that the debt surged above $27 trillion for the first time. In less than five months, Uncle Sam added another $1 trillion to its debt load. And there’s barely been a peep from the mainstream media.
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 bond holdings to $4.7 trillion. The Federal Reserve now holds a record 17.5% of all US debt.
After running the biggest December budget deficit in history, the US government followed up with another massive budget shortfall in January.
According to the Monthly Treasury Statement, the January deficit came in at $162.83 billion. That’s nearly five times bigger than the January 2020 shortfall.
The Joe Biden administration got underway last week. The newly inaugurated president issued a flurry of executive orders, many of them relating to the economy. In his podcast, Peter Schiff talked about the potential impact of these EOs. He said it looks like Americans voted for Joe Biden, but they ended up with Bernie Sanders.
The US government ran the biggest December deficit in history last month and there is no end in sight to the borrowing and spending. President Biden unveiled a new $1.9 trillion stimulus plan this week. So what? Why does it matter? Can’t this “rescue the economy?” Host Mike Maharrey talks about all of the spending and the money printing necessary to support it on this week’s Friday Gold Wrap podcast.