by Jim Quinn
Nothing like a one month budget deficit of $215 billion to get the stock market to new record highs. The markets yawn at the news, even though we used to run ANNUAL budget deficits below $215 billion before 2009. Interest on the national debt, even with historically low interest rates, will exceed $500 billion this year and will continue to increase exponentially. Annual interest on the debt in 2003 was $300 billion.
Even the horrific budget deficits detailed below are bullshit. They are massaged and adjusted to provide the best view. Even these numbers are trending towards a $1 trillion deficit. Bravo Trump. Go to the national debt page for a real dose of reality.
The national debt has gone up by $700 billion in the first five and a half months to $21 trillion. It is on track to go up by at least $1.4 trillion this year. With rates rising and deficits soaring, interest on the national debt will be over $700 billion per year by the end of Trump’s term. How long can this be sustained? I guess we’ll find out. It’s just maff.
U.S. February budget report shows first sign of wider deficits to come
The numbers: The U.S. government recorded a monthly budget deficit of $215 billion in February, up 12% from the same month last year due to lower revenue and higher spending. For the first five months of the fiscal year, the government’s deficit is $391 billion, $40 billion more than the shortfall during the same period last year.
What happened: Revenues were down 9% in February from same month last year. Withholding taxes were 2% lower. Spending was $7 billion more than in the same period a year ago. Outlays for net interest on the public debt increased by 9% to $28 billion. The rise in spending was led by gains in defense spending and for the aftermath of last years’ hurricanes.
Big picture: The decrease in withholding during the month is the earliest sign of the effect of the Trump tax cut, analysts said. March could show an even steeper drop. Economists say the changes in taxes and increased federal spending are likely to boost growth in 2018 and into 2019, but the trend is toward a modestly larger deficit. The Trump White House has forecast a $833 billion budget deficit for this year that ends Sept. 30, up from $666 billion in the prior year. Analysts think the deficit could be higher. The Congressional Budget Office is set to release its latest estimate on April 9.
Read: The U.S. is almost guaranteed to have large trade deficits year after year.
What are they saying?: “Between last [month’s] budget deal and December’s tax bill, the country is on a borrowing spree that will lead to the return of trillion-dollar deficits by next year and $2 trillion within a decade or so. We’ve taken fiscal recklessness to a new level and it’s time we begin our recovery,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget.