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Say Congrats To Donald Trump, The US Budget Deficit Exploded 26% To Nearly $1 Trillion In 2019
“President Trump’s economic agenda is working", Steve Mnuchin said, in a statement accompanying the federal budget report.
He's right. It is "working" - working to drive the deficit to infinity and beyond, that is.
The US budget gap exploded 26% wider for the fiscal year, to a truly "impressive" $984 billion, or 4.6% of GDP. That compares to $779 billion and 3.8% of GDP for the fiscal year 2018.
Receipts rose 4%, while outlays jumped 8.2% thanks to spending on Medicare, Social Security,
Great post, yes the deficit is a YUGE trump problem about to become an even Yuger problem — and of course Moscow mitch and all the GOP nazis will tell the rest of that deficits don’t matter ….
Gotta go, but here’s a little tool
https://www.newyorkfed.org/data-and-statistics/data-visualization/tri-party-repo/index.html#interactive/gcfrepos
Practically all developed nations have been running ever-increasing deficits for as long as I’ve been alive (born 1947).
The ratio ratio of those deficits to GDP has generally been increasing, with no calamitous effects (yet). This has led to the label “Modern Monetary Theory” where deficits indeed to not matter. Confidence matters. International trade matters. Relative currency stability matters. But the deficits themselves have yet to matter, unless you are Argentina or Turkey.
Trump will get away with his profligate federal spending. It’s just the way of the world.
Deficits do matter and there are budgets each year — which is why trump is in panic mode. Even if Congress continues to extend its Continuing Resolution games, they still have to balance the budget each year — hence, the trump panic can be seen in his search for funds for his private WALL project, which as I recall, is still a matter of debate in terms of appropriations and stealing money from the military budget and national security, etc … .. and several law suits related to the issues around this campaign problem.
The trillion dollar budget pie is only so large and has to be cut into various pieces to balance out. Many items do come up for negotiation over and over, but as trump gets boxed-in with deficits, he has to take away money from one group to give to another and so issues like the WALL and its campaign status are played against cutting Medicare, Medicaid, Education, Health Insurance and various messy problems which don’t work when you have a massive tax cut for the wealthy and then have Treasury revenues fall and deficit debt rises and then higher interest rates start to shrink ALL the pie pieces. That’s one of the keys actually, the interest on the debt is causing trouble with Treasury issuance — and actually it connects to IOER and Fed rates and this whole mess gets more and more complex.
Random news thing: “What’s more, the interest payments on the deficits become part of a mounting government debt that must be repaid and could depress economic growth in coming years. In fact, even with low rates this year, the government’s interest payments on the debt were one of the fastest growing items in the budget, rising nearly 16% to $375.6 billion.”
Mental note — That interest amount takes away from future Treasury issuance and other budget items, like the WALL!