Americans brace for recession… 2019 deficit surpasses $1 trillion… REPORT: Real Debt levels could be shocking 2,000% of economy

Poll: Trump approval falls as majority of Americans brace for recession

President Donald Trump’s job approval rating fell several points in a new survey, while Americans’ fears of a looming recession have escalated and their confidence in Trump’s handling of the economy has sagged.

Thirty-eight percent of respondents in an ABC News/Washington Post poll released Tuesday approve of Trump’s performance in office, a drop of 6 points from a peak of 44 percent approval in July. A majority, 56 percent, disapprove of the way Trump is handling his job as president, while six percent have no opinion.

Americans’ opinions on Trump’s stewardship of the economy, which his re-election effort plans to emphasize to voters as he battles for a second term, have also diminished, according to the survey.

Less than half of respondents, 46 percent, now approve of the way the president is handling the economy, a decrease from 51 percent approval in midsummer. Fewer of those polled, 35 percent, approve of the way the president is handling trade negotiations with China, and 60 percent are concerned that the trade conflict between the two countries will raise the price of goods for their families.

Trump has moved to intensify the tariff dispute with Beijing in recent weeks, announcing fresh hikes to duties on Chinese imports. The new front in the trade war, along with the president’s consistent attacks on Federal Reserve Chairman Jerome Powell, has played out as U.S. financial indicators have warned of a potential economic downturn or recession.

Deficit surpasses $1 trillion: CBO

The federal deficit surpassed $1 trillion in the first 11 months of fiscal 2019, the Congressional Budget Office (CBO) said Monday.

The deficit presently stands at $1.068 trillion, though it is likely to be reduced in September as quarterly tax payments are paid.

“In its most recent baseline projections, CBO estimated that the 2019 budget deficit would be $960 billion,” the CBO noted. That amount would be $181 billion higher than last year’s deficit.

The deficit as of Monday was running $168 billion ahead of the deficit in the last fiscal year at this time.

While mandatory spending such as Social Security and Medicare drive the deficit, it has shot up under President Trump‘s watch following the GOP tax cut bill and a series of bipartisan agreements to raise spending on both defense and domestic priorities.

The CBO has called the nation’s fiscal path “unsustainable,” noting that payments on interest alone were on track to overtake both defense and domestic spending by 2046.

Real US debt levels could be 2,000% of economy, a Wall Street report suggests

  • Total U.S. debt including all forms of government, state, local, financial and entitlement liabilities comes close to 2,000% of GDP, according to AB Bernstein.

  • The biggest potential load comes from entitlements, but is being pressured from rising levels of federal government debt as well.

  • The warnings about potential debt hazards come as the total federal debt outstanding has surged to $22.5 trillion.

  • A debt reform advocate says now is the time for the U.S. to tackle the issue, before recession hits.

 

Total potential debt for the U.S. by one all-encompassing measure is running close to 2,000% of GDP, according to an analysis that suggests danger but also cautions against reading too much into the level.

AB Bernstein came up with the calculation — 1,832%, to be exact — by including not only traditional levels of public debt like bonds but also financial debt and all its complexities as well as future obligations for so-called entitlement programs like Social Security, Medicare and public pensions.

Putting all that together paints a daunting picture but one that requires nuance to understand. Paramount is realizing that not all of the debt obligations are set in stone, and it’s important to know where the leeway is, particularly in the government programs that can be changed either by legislation or accounting.

513 views