The U.S. government is set to borrow nearly $1 trillion this year, an 84 percent jump from last year

Discussion in 'Politics' started by Tony Stark, Feb 9, 2018.

  1. Tony Stark

    Tony Stark

    The U.S. government is set to borrow nearly $1 trillion this year, an 84 percent jump from last year

    It was another crazy news week, so it's understandable if you missed a small but important announcement from the Treasury Department: The federal government is on track to borrow nearly $1 trillion this fiscal year — Trump's first full year in charge of the budget.

    That's almost double what the government borrowed in fiscal 2017.

    Here are the exact figures: The U.S. Treasury expects to borrow $955 billion this fiscal year, according to documents released Wednesday. It's the highest amount of borrowing in six years, and a big jump from the $519 billion the federal government borrowed last year.

    Treasury mainly attributed the increase to the “fiscal outlook.” The Congressional Budget Office was more blunt. In a report this week, the CBO said tax receipts are going to be lower because of the new tax law.

    The uptick in borrowing is yet another complication in the heated debates in Congress over whether to spend more money on infrastructure, the military, disaster relief and other domestic programs. The deficit is already up significantly, even before Congress allots more money to any of these areas.

    “We're addicted to debt,” says Marc Goldwein, senior policy director at Committee for a Responsible Federal Budget. He blames both parties for the situation.

    What's particularly jarring is this is the first time borrowing has jumped this much (as a share of GDP) in a non-recession time since Ronald Reagan was president, says Ernie Tedeschi, a former senior adviser to the U.S. Treasury who is now head of fiscal analysis at Evercore ISI. Under Reagan, borrowing spiked because of a buildup in the military, something Trump is advocating again.

    Trump didn't mention the debt — or the ongoing budget deficits — in his State of the Union address. The absence of any mention of the national debt was frustrating for Goldwein and others who warn that America has a major economic problem looming.

    “It is terrible. Those deficits and the debt that keeps rising is a serious problem, not only in the long run, but right now,” Harvard economist Martin Feldstein, a former Reagan adviser, told Bloomberg News.

    The White House got a taste this week of just how problematic this debt situation could get. Investors are concerned about all the additional borrowing and the likelihood of higher inflation, which is why the interest rates on U.S. government bonds hit the highest level since 2014. That, in turn, partly drove the worst weekly sell-off in the stock market in two years.

    The belief in Washington and on Wall Street has long been that the U.S. government could just keep issuing debt because people around the world are eager to buy up this safe-haven asset. But there may be a limit to how much the market wants, especially if inflation starts rising and investors prefer to ditch bonds for higher-returning stocks.

    “Some of my Wall Street clients are starting to talk recession in 2019 because of these issues. Fiscal policy is just out of control,” says Peter Davis, a former tax economist in Congress who now runs Davis Capital Investment Ideas.

    The Federal Reserve was also buying a lot of U.S. Treasury debt since the crisis, helping to beef up demand. But the Fed recently decided to stop doing that now that the economy has improved. It's another wrinkle as Treasury has to look for new buyers.

    Tedeschi, the former Treasury adviser to the Obama administration, calls it “concerning, but not a crisis.” Still, he says it's a “big risk” to plan on borrowing so much in the coming years.

    Trump's Treasury forecasts borrowing more than $1 trillion in 2019 and more than $1.1 trillion in 2020. Before taking office, Trump described himself as the “king of debt,” although he campaigned on reducing the national debt.

    The Committee for a Responsible Federal Budget predicts the U.S. deficit will hit $1 trillion by 2019 and stay there for a while. The latest borrowing figure — $955 billion — released this week was determined from a survey of bond market participants, who tend to be even faster to react to the changing policy landscape and change their forecasts.

    Both parties claim they want to be “fiscally responsible,” but Goldwein says they both pass legislation that adds to the debt. Politicians argue this is the last time they'll pass a bill that makes the deficit worse, but so far, they just keep going.

    The latest example of largesse is the GOP tax bill. It's expected to add $1 trillion or more to the debt, according to nonpartisan analysis from the Joint Committee on Taxation (and yes, that's after accounting for some increased economic growth).

    But even before that, Goldwein points to the 2015 extension of many tax cuts and the 2014 delays in Medicare reimbursement cuts.

    “Every time you feed your addiction, you grow your addiction,” says Goldwein.

    There doesn't seem to be any appetite for budgetary restraint in Washington, but the market may force Congress's hand.
    Frederick Foresight likes this.
  2. Tony Stark

    Tony Stark

    Clinton left the deficit lower than it was when he came into office,even better he turned Reagan's and Bush 1's deficit into a surplus.

    Obama left the deficit lower than it was when he came into office,turning the 1.2 trillion dollar deficit Bush left him into around a 600 billion dollar deficit .

    Bush came into office with a budget surplus that was paying down the debt and left office with a 1.2 trillion dollar deficit that added trillions to the debt

    Trump came into office with a deficit around 600 billion,and its already close to a trillion :vomit:
    Frederick Foresight likes this.
  3. Tony Stark

    Tony Stark

    Hypocrisy and debt: Budget deal will continue the spending surplus

    By Sen. Rand Paul (R-Ky.), Opinion Contributor — 02/08/18 01:50 PM EST

    “Debt, debt, everywhere and not a dollar to spare.” The Tea Party won on a message that our mounting debt was a threat to our very security. And yet . . . when push came to shove, the debt grew - and hypocrisy replaced promise.

    Hypocrites, hypocrites . . . who are the greatest hypocrites of all? The search need not be lengthy. Washington abounds with hypocrites of all stripes. Republicans? To be sure. Democrats? To be sure.

    Both parties deserve equal parts of the blame, because they both want to spend more. The Republicans clamor for more military spending. The Democrats say, “Ok, but only if you give us more welfare spending.” And the sorry, rotten, corrupt bargain goes on. And the debt roars upward, unabated, passing $20 trillion with no end in sight.

    “Deficits don’t matter,” Dick Cheney once said. And yet . . . the last few days show a stock market that is spooked. Some say it’s the mounting debt and a lack of concern by both parties to address it.

    This year, the annual debt will approach and may exceed a trillion dollars.

    I remember the heady days when the Tea Party swept in a Republican majority in the House. The biggest sweep by conservatives in a lifetime – nearly a hundred “deficit hawks” elected.

    For certain, now Congress would finally go after the debt. The Tea Party railed on about the trillion-dollar annual deficits of President Obama. Surely, the will now existed to contain big government . . .

    At first, Republicans only controlled the House, and the powers that be cautioned – “we only control one third of government. We can’t be expected to control the debt.” And so the debt continued to grow.

    Then, Republicans took the Senate, and the sage elders counseled – “We only control two thirds of government. We can’t be expected to control the debt. We need the White House.” And so the debt continued to grow.

    And then, surprise, surprise – the Republicans won the White House and controlled all three branches, 100 percent of government.

    Surely, now the debt would be controlled! Yet, it came to pass, that Republican voices, once raised on high, intoned – “Now, we must govern. Now, we must spend.”

    The loudest voices in Congress for breaking the spending caps are now Republican. “The military is being hollowed out,” they cry, even though military spending has more than doubled since 2001.

    Meanwhile, the Democrats were long and loud in opposing the recent tax cut because it would add to the deficit. Yet, when questioned on their opposition to busting the budget caps on the military, their response was, “Oh, we’re ok with busting the military caps on spending, as long as we can bust the caps on domestic spending, too.”

    Let’s be clear on one thing – tax cuts aren’t the problem. We don’t have a tax deficit. We have a spending surplus. We spend too much, and not enough people are wiling to stop it.

    The dirty little secret . . . neither party really cares enough about the debt.

    When I attempted to add instructions to the budget to contain entitlement spending, I received only three votes plus mine. The dirty little truth is that neither party cares about the debt.

    They will care only when the sky begins to fall. It will take a calamity. It will take a 2008-like crisis that blows through the backstop of the Federal Reserve printing press before Congress recognizes the severity of the debt crisis that faces us.

    Let’s all hope that before that crisis comes, saner minds will prevail and understand that great nations cannot last forever on borrowed time, or borrowed money.

    Paul is the junior senator from Kentucky.
  4. Tony Stark

    Tony Stark

    Not because of the deficit,only because they hated having a black President.No outrage what so ever from Trump and Bush massively increasing the deficit.
    Frederick Foresight likes this.
  5. Tony Stark

    Tony Stark

    Paul should have noted Obama came into office with a 1.2 trillion dollar deficit(and left with a deficit around 600 billion).Bush and Trump came into office with deficits far less than a trillion and turned them into trillion dollar deficits
    Frederick Foresight likes this.
  6. Tony Stark

    Tony Stark

  7. Tony Stark

    Tony Stark

    Last edited: Feb 9, 2018
    exGOPer likes this.
  8. The man at the helm has a system. The Atlantic City casino owner is leaving his mark.
    Tony Stark likes this.
  9. Tony Stark

    Tony Stark

    Obama was willing to cap both military and domestic spending with the sequester,but Trump and Republicans in charge are not.But its Obama the fiscal hawks hate :cool:
    Frederick Foresight likes this.
  10. Tony Stark

    Tony Stark

    #10     Feb 9, 2018
    Frederick Foresight likes this.