Fiscal 2020 started just like fiscal 2019 ended – with a massive federal budget deficit. And that has Federal Reserve Chairman Jerome Powell worried. In an ironic bit of political theater, Powell lectured Congress about the spending he helps facilitate.
The budget shortfall last month was 34% higher than the October 2018 deficit, coming in at $134.5 billion, according to the latest Treasury Department report. That starts fiscal 2020 off on track to eclipse a $1 trillion deficit.
Uncle Sam is spending money far faster than he’s taking in. The US federal government ran the biggest budget deficit in seven years in fiscal 2019, according to the Treasury Department. And the spending is even worse than advertised.
The $984 billion deficit amounts to 4.7 percent of GDP. That’s the highest percentage since 2012. It was 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 out of control spending and spiraling deficits are concerning enough on their own terms, but they become absolutely horrifying when you consider that these budget shortfalls are happening during an economic expansion. You would normally expect numbers like this during a major recession.
That raises an important question: what’s going to happen when the recession hits?
The federal government continues to spend America into a black hole and has already topped last year’s budget deficit with two months left in the fiscal year.
The US budget deficit in July came in at $120 billion thanks to a surge in spending, according to data released by the Treasury Department.
Uncle Sam spent $371 billion in July. That was 23% more than the government spent in July 2018. The Treasury brought in $251 billion. That number was up 12% compared to July 2018.
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.