US Seen Hemorrhaging Red Ink As Deficit To Top $1 Trillion Sooner Than Expected

In news that shouldn't surprise anybody considering the well-documented trend and also considering the country is run by the self-declared "king of debt", whose penchant for bankrupting things is the stuff of legend, the Congressional Budget Office's latest forecasts show the US traversing an even more perilous fiscal path than previously thought. "In our projections, the federal budget deficit is $960 billion in 2019 and averages $1.2 trillion between 2020 and 2029", the CBO said Wednesday. T
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29 thoughts on “US Seen Hemorrhaging Red Ink As Deficit To Top $1 Trillion Sooner Than Expected

  1. This is EXACTLY why when the bond desk looked like Best Buy on Black Friday the Fed and Treasury should have been SELLING everything they could and unwind as much as they could so when rates rise which they will they can have the ammo to keep rates from skyrocketing much like they did in Greece…. Don’t think it can’t happen, with Trillion Dollar Annual Deficits it could happen and will happen eventually maybe not this year or next year or even in 5 years but someday the rest of the world will have had enough of the U.S.A constant and consistent fiscal irresponsibility. They can’t keep printing money like they are for the last 10 years into infinity…. Something has to give, whoever is short treasurys when they reach the targets some are throwing out there near or equal to zero will be the next Gates, Buffett and Slim, when the bond market collapses which it eventually will it will make 2008 look like an cheap $1 fast food appetizer

  2. So receipts from corporations were 16 percent lower than CBO projections while they were 3 percent higher for individuals — many of whom faced a higher overall tax burden thanks to the elimination of the SALT deduction. That tells you everything you need to know about voodoo…er, supply-side economics: tax cuts almost always lead to lower receipts, while tax increases have the opposite effect (i.e., more revenue for the government). Someone please explain that to Kudlow and Art Laffer.

    1. But, but, but ,,,, supply side tax cuts worked in the past! Well, once, back in 1963 when rates were cut from 80% or so. Maybe.

      What a pair of damning statistics.

    2. Real GDP grew over one-third during Reagan’s presidency, an over $2 trillion increase. The compound annual growth rate of GDP was 3.6% during Reagan’s eight years, compared to 2.7% during the preceding eight years… During the Reagan administration, fiscal year federal receipts grew from $599 billion to $991 billion (an increase of 65%)

      Never let facts stand in the way of a good theory.

      1. Didn’t Reagan increase taxes when he realised his tax cuts weren’t working? The reality now is that the deficit is growing and any comparison with Reagan isn’t germane.

        1. Exactly. And Bush senior raised them as well. And Clinton raised them for the top earners, and we actually balanced the budget (for a year). Supply side has been an unmitigated disaster for the fiscal health of the country.

          1. Supply side has been an unmitigated disaster for the fiscal health of the country.

            Sure, except for all the statistics that actually matter: GDP and tax revenue growth, employment growth, inflation going down from 10% to 4%. These are facts, whether you like them or not.

        2. From the same wiki article:

          According to historian and domestic policy adviser Bruce Bartlett, Reagan’s tax increases over the course of his presidency took back half of the 1981 tax cut.

          Thus, you can argue that Reagan realized that he went too far in 1981 but you cannot argue that tax cuts didn’t work.

          The deficit was growing back then as well so, as long as we are talking about supply-side economics, comparisons with Reagan are germane.

  3. Who knew that hyperbolic growth rates designed to excite his dumbass base of retards would in fact be nothing but fluffy, retarded projections based on the hopes and dreams of his retarded groupies?

  4. Nobel economist Paul Krugman says zero interest rate environment the ‘new normal’ ( 14 Jul, 2016)

    “New York-based economist says US interest rates trapped in conditions similar to the 1930s for the foreseeable future

    “The Fed really, really wants to raise rates. They may do it. The statistics doesn’t look so bad. But if the Fed does raise rates, it’ll be sorry. We’ll just be importing dollar strength,” he said.”

  5. Sure, except for all the statistics that actually matter: GDP and tax revenue growth, employment growth, inflation going down from 10% to 4%. These are facts, whether you like them or not. What do any of those have to do with supply side? Growth in GDP, epmployment, and tax revenue were all a function of huge numbers of boomers putting down their bongs, forming households, and becoming excellent consumers (with a great penchant for debt). Inflation went down thanks to Paul Volcker and globalization. The benefits of supply side are a myth.

    1. Here’s what it has to do with supply-side: massive tax cuts lead much reduced tax burden on the population and to much improved economy, as advertised. What was the disaster?

      1. That’s a theory. Correlation does not equal causation. Massive tax cuts lead to massive deficits; that’s established fact. No solid empirical evidence that they lead to growth. Sorry.

        1. Well, no: tax cuts lead to (or at least were followed by) massive growth in tax receipts. What led to deficits was the spending growth.

          You did not explain the “unmitigated disaster” though.

          1. Some growth in tax receipts, massive growth in deficits, which required massive borrowing, which crowded out lots and lots of the private sector investment, leading to a three-decade regime of financial repression and the slow extinguisihing of animal spirits in the economy — i.e., the massive and accelrating deficits are the unmitigated disaster, and they’re a function of BOTH lower receipts and undisciplined spending.

      2. supply-side economics is a laughing stock with a track record on par with Donald Trump’s business career. everybody knows that. this is why the people you see pushing it are, in many cases anyway, sock puppets without economics degrees. e.g., Stephen Moore and Larry Kudlow. It is such a standing joke that most economic satirists barely think it’s worth the time to lampoon, including me. supply-side economics does not work. period.

        1. Yes, I am fully aware of the prevailing in the liberal circles opinion that laughter is a great substitute for the argument. However, facts are what they are and they get to have the last laugh.

          1. I’m not sure what you’re talking about. the facts do not support supply-side economics. it is the opposite of that. i mean, i’m not trying to be derisive here, but i feel like maybe you aren’t all that familiar with this debate. this isn’t a situation where it makes much sense to argue the side you’re trying to argue — even a trained economist trying to play devil’s advocate would have a difficult time with it. the body of evidence is so overwhelming that implicitly asking me to cite it is like asking someone to cite evidence to support the contention that the earth is round. it doesn’t seem like you are aware of this reality, which is certainly fine, it hardly makes for compelling reading for most people, but i would definitely encourage you to go to Google Scholar and spend a week or two just reading peer-reviewed academic journal articles on the subject. what you are trying to argue isn’t reality. that’s about the best way i can describe it.

  6. @heisenberg

    I cited most relevant statistics characterizing the American economy under Reagan. The facts are very stubborn. No amount of academic literature will convince me that the country did not prosper under Reagan. Just like (I hope) the same peer-reviewed academics did not convince you that the Efficient Market Theory is true, or did they?

  7. @mfn

    Sorry but you are not making a lot of sense.

    First, you agree that tax receipts grew and the deficits are due to spending growth, but in the end you return again to the untruthful claim that tax receipts were lower. I’m not sure the latter is a part of supply-side economics that we are debating. Because if it is then we live under supply-side economics ever since – surely you know that spending only goes up and up and up. Then I don’t know what we are debating. It is fair to say that it was under Reagan that we started to grow massive budget deficits. One can blame it on Reagan personally or on the democratic Congress, or on both. Some people say today that massive deficits don’t even matter anymore. I only say that it has nothing to do with supply-side economics and that most of the debt was accumulated under subsequent presidents. Yes, it happened after Reagan, but after doesn’t equal because.

    I have no idea what you call “financial repression” or “animal spirits”.

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