Daily chartAmerica’s Treasury ramps up borrowing to finance the Republican tax cuts Increased debt issuance and lower demand from the Fed are pushing up borrowing costs Graphic detail May 4th 2018 IT IS a central principle of Keynesian economics that governments should stimulate demand during recessions by cutting taxes and boosting spending. Conversely, when times are good and unemployment is low, budgets should be kept in check. However, these conventional counter-cyclical prescriptions seem to hold little sway with White House policymakers. In his first year in office, Donald Trump has turned Keynes on his head, pushing through a massive fiscal stimulus during America’s second-longest economic expansion in history. The shift in America’s fiscal outlook has been swift. In recent months the president has signed both a tax-cut package that will cost as much as $1.9trn over the next decade and a two-year budget deal that increases federal spending by $300bn. As a result, the Congressional Budget Office (CBO), a non-partisan number-cruncher, reckons that America’s deficit will be $800bn in 2018 and $980bn in 2019, or 57% above forecasts made before Mr Trump’s election (see chart). With lower revenues and higher spending, Uncle Sam is now borrowing at a historic clip. This week the Treasury Department reported that the federal government borrowed $488bn in the first quarter of 2018, equivalent to $5.4bn every day. The Treasury now estimates that federal borrowing will reach $1.1trn this fiscal year, similar to the amount borrowed in 2011 when America was recovering from its worst economic downturn since the Great Depression. All of this red ink is beginning to rattle debt markets. Concerns about an overheating economy and increased debt issuance have helped drive the yield on 10-year Treasury bonds up to 3%. The Federal Reserve, meanwhile, is expected to continue raising interest rates and drawing down its portfolio of Treasury debt in the coming years. On Monday, Treasury Secretary Steven Mnuchin insisted that the bond market will absorb all of this new debt. “It’s a very large, robust market” he told Bloomberg TV. “I think the market can easily handle it.” This is probably true. Whether lawmakers in Washington will be happy when the bill comes due is another matter. https://www.economist.com/blogs/graphicdetail/2018/05/daily-chart-2
Have faith in the business acumen of President Trump. It takes a very special individual to bankrupt a casino...
Half the casinos in Atlantic City have gone BK in the last 10 years. Including Revel which was only open for about two years. The new casinos in CT, PA, and Yonkers simply took their business. But, why let details ruin a liberal narrative? Never stopped them before
Trump's casino went under because of the high interest to debt he used to fund the casino and pillaging. He did try and save costs by not paying local contractors and suppliers, as you do. Sending many to the wall. Trump actually bankrupted that casino twice. Even a good job by his standards. Suppose he had the grift down after Trump University.. Truth is, you wouldn't leave him in charge of a lemonade stand. Why do YOU let details ruin the narrative......
The Feds should have taken the opportunity to issue 100 year paper at low rates when there was the chance to do so.