The US government is rolling in dough!
US tax receipts have surged this year. Through August, the US Treasury had collected over $4.4 trillion in revenue for fiscal 2022 with one month left to go. That was already 10% higher than receipts in 2021. The US government took in $303.73 billion in August alone. That was up 23% from August 2021.
“I can scarcely contemplate a greater calamity that could befall this country than to be loaded with a debt exceeding their ability to ever discharge.” – Brutus
Well, here we are.
On Monday, the US national debt eclipsed $31 trillion for the first time in history.
Federal Reserve rate hikes will add trillions to the national debt, according to an analysis by the Committee for a Responsible Federal Budget.
We got the August CPI data this week and it came in hotter than expected. Stocks suffered a big selloff. Everybody is betting on the Fed to get even more aggressive in its inflation fight. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey breaks down the data and exposes a dirty little secret that the mainstream still hasn’t come to grips with.
Some things never change — such as the federal government spending more money than it has month after month after month.
August was no different. The US government ran a massive $219.6 billion budget deficit last month, according to the latest Monthly Treasury Statement. That nudged out July as the second-largest monthly deficit in fiscal 2022.
What happens if the Federal Reserve loses money?
The Fed typically earns interest income from all of the bonds it holds on its balance sheet. It also collects fees for services that it provides. Most of any Fed operating profit is remitted to the US Treasury under federal law. That money becomes part of the federal government’s operating budget. In other words, the central bank serves as a revenue source for Uncle Sam.
The Kansas City Federal Reserve Bank published a rather surprising paper that swerves into the truth – the Fed can’t win this inflation fight. In this episode of the Friday Gold Wrap podcast, host Mike Maharrey talks about the paper. He also discusses the possibility of a dollar decline and gives his first impression of the August jobs report.
President Biden is expected to announce student loan forgiveness on Wednesday (Aug. 24). The plan will reportedly cancel $10,000 in student loan debt for anybody making less than $125,000 per year.
A lot of people think this is like waving a magic wand — poof — the debt is gone. But somebody has to pay and that somebody is the American taxpayer.
The US government is addicted to spending money. And the Federal Reserve is Washington DC’s pusher.
When we talk about inflation, we usually focus on money creation by the Fed. After all, that is the definition of inflation. But the Fed has to keep creating money in order to monetize the massive federal deficit. And until Uncle Sam gets his spending problem under control, inflation will never truly abate.
There is no sign the US government is going to get its spending problem under control. Last month, the feds ran the second-largest July budget deficit in history.
The Federal Government ran a $211B deficit in July. Except for February, this was the largest deficit since last July when the Treasury ran a deficit of $302B, and it was the second-largest July deficit ever.
