The federal government continues to spend money at an insane rate and is running up budget deficits reminiscent of the Great Recession era.
With one month left to go, the federal budget deficit for fiscal year 2019 eclipsed $1 trillion in August, according to Treasury Department data released last Thursday.
Donald Trump has been badgering Federal Reserve Chairman Jerome Powell for months, begging for lower interest rates. Yesterday, he took things to another level, saying that the “boneheads” at the Fed need to push rates into negative territory.
In his podcast, Peter Schiff said negative interest rates are boneheaded.
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.
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.
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.
Do deficits even matter?
They used to — at least in conservative circles. And even in some progressive circles when Republicans were in control of Washington D.C. But today, the federal government is running record deficits and has pushed the national debt over $22 trillion and virtually nobody even bats an eye.
In a recent Wall Street Journal article, John Yarmuth, chair of the House Budget Committee summed up the attitude toward the spending and debt in Washington D.C. He said he rarely hears from constituents concerned about rising deficits and debt. Many voters’ attitudes, he says:“There haven’t been any cataclysmic consequences, so why worry about it?”
The government is regulating you to death. Sometimes literally. But there are some things you can do about it. In this episode of It’s Your Dime, host Mike Maharrey talks about it with libertarian activist and author Mary Ruwart.
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.
Month after month, the Trump administration runs multi-billion dollar deficits. The national debt has ballooned to over $22 trillion. According to the most recent Treasury Report, the US has a net worth of negative $21.5 trillion. And this understates the problem.
As Wolf Richter of WolfStreet puts it, the US government has “debt out the wazoo.”
Is this sustainable?