Trump’s bipartisan spending deal took a step closer to reality last week when the US House passed a budget bill by a 284-149 vote.
The bill increases discretionary spending from $1.32 trillion in the current fiscal year to $1.37 trillion in fiscal 2020 and then raises it again to $1.375 trillion the year after that. The deal will allow for an increase in both domestic and military spending.
After claiming to be the greatest at just about everything, Donald Trump has finally found an area where he can stake a credible claim. By negotiating a disastrous budget deal with Democrats, the President could become the greatest creator of government debt in the history of the country.
While Trump is selling the two-year deal as a major victory because it increases military spending and removes the possibility of a government shutdown for two years, in reality, the agreement to suspend the debt ceiling and push annual deficits even further above the trillion-dollar mark may only succeed in destroying the Republican Party as we know it.
We got the first Q2 GDP estimate on Friday. Economic growth slowed to 2.1%, but the number came in slightly better than economists had projected.
In his most recent podcast, Peter Schiff broke down the GDP report. As he put it, when you actually look beneath the numbers, the quarter was a disaster.
This was a horrible quarter for GDP.”
Gold has risen to six-year highs in recent weeks as the Federal Reserve has pivoted back toward an easy-money monetary policy. Markets widely anticipate a Federal Reserve interest rate cut this week and the economy appears to be slowing.
Peter Schiff recently appeared on RT Boom Bust to explain why he believes this is the beginning of a much bigger long-term rise in the price of gold. And it’s not just because the Fed is cutting rates.
US Treasury Secretary Steve Mnuchin said the Trump administration and congressional leaders are getting closer to a deal to raise the debt ceiling.
Meanwhile, the US budget deficit is has increased by 23.1% year-on-year through the first nine months of fiscal 2019.
Mnuchin wants Congress to go ahead and raise the debt ceiling before the August recess because analysts now think the government will hit its borrowing limit earlier than expected.
During a recent interview, President Donald Trump lamented the fact that we don’t have a bigger bubble and blamed Federal Reserve Chair Jerome Powell. Trump said that even though Powell was his pick, he “disagrees with him entirely.” He said that if it weren’t for the Fed, we’d have even stronger GDP growth.
Frankly, if we had a different person in the Federal Reserve that wouldn’t have raised interest rates so much, we would have been at least a point and a half higher. I’m not happy with what he’s done.”
As Peter Schiff pointed out in his podcast, this is the exact opposite of Trump’s position when he was campaigning. Now that he’s in the White House, Trump has turned into a Keynesian on steroids.
If you were thinking federal government spending might slow down a bit after the national debt crossed the $22 trillion mark – well, it didn’t.
Last month, the federal budget deficit came in at $208 billion, according to Treasury Department data. It was the largest May deficit in history.
Uncle Sam spent $440 billion last month, up 21% year-on-year. Receipts increased to $232 billion, up 7% from May 2018.
The federal government is borrowing money at levels one would expect to see during a major economic crisis. According to the Congressional Budget Office, the federal deficit for the fiscal year 2018 will come in at around $804 billion. That is expected to balloon to around $985 billion in fiscal 2019.
Does that seem pretty bad to you? Well, it’s even worse than you think.
If you look at the increase in the federal debt, you’ll find that it is bigger than the deficit. How can this be? The government simply excludes some of the money it borrows in the deficit.
The mainstream investment world is starting to worry about the federal debt.
Goldman Sachs sees a tidal wave of red ink — and it may drag the US economy into its undertow.”
Goldman recently released a note to clients saying virtually the same thing Peter Schiff has been saying for months. The US economy won’t likely get the promised economic growth out of GOP tax cuts – at least not over the long-haul.