Federal Reserve rate hikes will add trillions to the national debt, according to an analysis by the Committee for a Responsible Federal Budget.
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.
Did you know the Biden administration is still handing out COVID-19 stimulus money?
In fact, there are still billions of dollars in pandemic aid sitting in various federal and state government accounts waiting to be handed out.
It appears somebody at the Federal Reserve has figured out that the central bank can’t tame inflation, so it’s setting up a scapegoat – Uncle Sam.
A paper co-authored by Leonardo Melosi of the Federal Reserve Bank of Chicago and John Hopkins University economist Francesco Bianchi and published by the Kansas City Federal Reserve argues that central bank monetary policy alone can’t control inflation.
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.
Last weekend, the Senate gave final approval to the so-called “Inflation Reduction Act.” Despite the catchy title, it is nothing but a tax-and-spend bill. The pundit class insists this will not only cool inflation but will also lower the budget deficit. This is a pipe dream. As Ron Paul explains, the bill will not only increase inflation, it will also increase government spending and taxes.
Congress passed a bill to prop up the US semiconductor industry last week and is now considering a new spending plan dubbed the “Inflation Reduction Act.” On his podcast, Peter Schiff talked about the Democrats’ legislative agenda and concluded that the “Inflation Reduction Act” will do the exact opposite.
Ronald Reagan once said the most terrifying nine words in the English language are, “I’m from the government and I’m here to help.”
One of the biggest problems with government help is that it always comes at a cost. And the burden of that cost almost always falls on the very people that big government claims to help – the poor and middle class.
After running a budget surplus in April thanks to an influx of tax-day tax receipts, the federal government reverted back to running a deficit in May.
The budget deficit was $66.22 billion last month, according to the monthly Treasury statement. That raises the current fiscal year deficit to $426.2 billion with four months left to go.