US Gross National Debt Jumps by $1.27 Trillion in Fiscal 2018, Hits $21.5 Trillion

But wait — these are the Boom Times!

The US gross national debt jumped by $84 billion on September 28, the last business day of fiscal year 2018, the Treasury Department reported Monday afternoon. During the entire fiscal year 2018, the gross national debt ballooned by $1.271 trillion to a breath-taking height of $21.52 trillion.

Just six months ago, on March 16, it had pierced the $21-trillion mark. At the end of September 2017, it was still $20.2 trillion. The flat spots in the chart below, followed by the vertical spikes, are the results of the debt-ceiling grandstanding in Congress:

These trillions are whizzing by so fast they’re hard to see. What was that, we asked? Where did that go?

Over the fiscal year, the gross national debt increased by 6.3% and now amounts to 105.4% of current-dollar GDP.

But this isn’t the Great Recession when tax revenues collapsed because millions of people lost their jobs and because companies lost money or went bankrupt as their sales collapsed and credit froze up; and when government expenditures soared because support payments such as unemployment compensation and food stamps soared, and because there was some stimulus spending too.

But no – these are the good times. Over the last 12-month period through Q2, the economy, as measured by nominal GDP grew 5.4%. “Nominal” GDP rather than inflation-adjusted (“real”) GDP because the debt isn’t adjusted for inflation either, and we want an apples-to-apples comparison.

The increases in the gross national debt have been a fiasco for many years. Even after the Great Recession was declared over and done with, the gross national debt increased on average by $954 billion per fiscal year from 2011 through 2017.

And the regular debt-ceiling fights in Congress, rather than accomplishing something noticeable in terms of fiscal rectitude, are just political charades that leave some flat spots in the chart above followed by some dizzying spikes right afterwards.

But now we have even more profligacy: Increased spending combined with tax cuts. As a result, the surge in the debt in fiscal 2018 of $1.27 trillion was 33% more than the already mind-blowing average surge in the debt over the past seven fiscal years ($954 billion).

For the first 11 months of fiscal 2018, through August, total tax receipts inched up by only $19 billion, or by 1%, according to the CBO, though the economy, as measured by nominal GDP, grew at an annual rate of about 5.4% (none of the figures are adjusted for inflation).

This 1% increase in revenues was distributed as is to be expected:

  • Individual income and payroll tax receipts rose by $105 billion, or by 4%.
  • Corporate income tax receipts fell by $71 billion, or by 30%, due to the new corporate tax law.
  • Revenues from other sources fell by $16 billion or by 6%. This includes declines in the remittances from the Federal Reserve, which sends most of its profits to the Treasury Department, but now pays banks more on their excess reserves, and thus remits less to the Treasury Dept.

Outlays surged by $240 billion, or by 7%, over the first 11 months of fiscal 2018, compared to the same period in the prior year.

The CBO estimates that the “deficit” will be $895 billion in fiscal 2018. These annual “deficits,” based on government accounting, are almost always substantially smaller than the increase in the gross national debt. But it’s the debt that finally accounts for all the money the government spends minus the money it receives: The difference has to be borrowed, and that difference in fiscal 2018 between what it paid out what it received in revenues was $1.27 trillion.

The US is “on an unsustainable fiscal path, there’s no hiding from it,” explained Fed chairman Jerome Powell during the press conference.  Read…  The Fed’s Not Backing Off: Powell’s Standouts & Zingers at the Press Conference  
 

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  130 comments for “US Gross National Debt Jumps by $1.27 Trillion in Fiscal 2018, Hits $21.5 Trillion

  1. Adam Smith Engineer
    Oct 1, 2018 at 8:11 pm

    These are the good times and I have been waiting for the good times to end for years. These magicians or the master gamblers, whatever you call them, are very talented. They add up more debt by the trillions, and still able to keep this casino going. There is no end in sight. I am starting to develop respect for them, you know.

    • KPL
      Oct 1, 2018 at 10:10 pm

      Well said!

    • Shawn
      Oct 2, 2018 at 10:25 am

      Don’t worry, the current ‘official’ rate of inflation is well above 2% closing in on 3%. Good luck lowering interest rates.

      • van_down_by_river
        Oct 2, 2018 at 1:24 pm

        Interest rates are set by fiat by central planners – interest rates will be lowered and soon.

        The Fed is a (not so) independent corporation but they serve at the behest of the government and the powerful banking cartel, both of these entities will demand lower interest rates to stay afloat and the Fed will give them what they demand.

        Our craft has passed the black hole event horizon, of structural deficits growing out of control, faster then GDP, and no currency can survive after this point has been passed, we are being sucked into the black hole of ever growing piles of fiat currency – it’s too late to escape the gravitational pull.

        Not sure exactly when, but likely within 5 years, there will be a panic to get out of the dollar. When that happens the dollar will hyper inflate and those left holding electronic currency units in various accounts will be holding a bag of poop.

        The game is over except for the yelling. The U.S. government is left with one last piece on the chess board yet they refuse to concede they have lost – childish. How will Americans, so accustomed to a something for nothing lifestyle, react to not being able to purchase consumer products and endless military hardware with freely created money? No doubt many will not survive – that’s on Bernanke.

    • Gershon
      Oct 2, 2018 at 6:24 pm

      These magicians or the master gamblers, whatever you call them, are very talented. They add up more debt by the trillions, and still able to keep this casino going.

      These gold collar criminals have used their control of the Fed and central banks to create the biggest asset bubbles and debt pyramids in human history. This “boom” is fake wealth created by fake money, using tricks like stock buybacks with borrowed money that used to be illegal, while captured and complicit regulators, enforcers, and policymakers have set the stage for a financial collapse that is going to dwarf every other financial crisis this planet has ever seen.

  2. mkruger
    Oct 1, 2018 at 8:15 pm

    Let’s see….that’s about 65K in national debt for every man, woman, and child residing in the United States. Not sure I got my money’s worth there. Heck, for another 10K, I could have bought a Tesla model S.

  3. Keeper Hill
    Oct 1, 2018 at 8:17 pm

    It won’t be paid. Soft or hard tacos. Choose your default.

    • Old Engineer
      Oct 1, 2018 at 8:56 pm

      Of course it won’t be paid off. Why would it? No one in the US expects to pay off debt. It is paying the interest on the debt that causes the problems: for companies, for individuals, and for countries. And that will set the limit on how high the FED allows interest rates to go. And the higher the debt, the lower that number will be.
      In fact as debt continues to rise either govt revenues will have to rise (haha) or interest rates will have to come down.

      • Paul
        Oct 2, 2018 at 6:47 am

        There is no absolute need for the Federal government to issue debt to spend money.

        JFK ordered some money to be spent without associated debt, but not sure if it ever got done or not.

        Thus, the federal debt is a different issue than the rest.

      • JZ
        Oct 2, 2018 at 10:11 am

        Print 10X money and raise price 10X, GDP goes up 10X, debt/gdp drop by factor of 10X. Old debt is paid, integrate rate 1000% for new debt. Here is the thing, the 1000% in new debt is the rate for the coming 1 year or two but you can destroy the debt accumulated for the past 30 to 40years. Debt paid.
        I am NOT suggesting this is practical, but this is a thought response to your “debt will NOT be paid and rate can NOT rise” conclusion.

        • Anon2017
          Oct 2, 2018 at 11:26 am

          Germany tried deficit spending instead of raising taxes after WWI to pay off its war related debt and reparations. By 1923, German paper money had become virtually worthless. It created a few winners but many losers. Under the old Gold Standard, 1 German mark was worth about $0.25 US. At the time of the final currency collapse in late 1923, it took 4 trillion marks to buy $1 US. When the German unemployment started to increase significantly after the (US) Smoot-Hawley tariff was passed in 1930, many Germans became disillusioned with the old line political parties. In 1932, the Nazi party was able to tap into this dissatisfaction and gained the largest number of votes in two sets of national elections.

          I guess our politicians in DC think nothing really bad will happen on their watch.

        • Gershon
          Oct 2, 2018 at 6:27 pm

          I hope the future generations that are being shafted by all this debt are absolutely remorseless when it comes to settling accounts with the Boomers and policymakers who bequeathed them this sorry state of affairs.

    • Crysangle
      Oct 1, 2018 at 9:18 pm

      You don’t know, they could just send out the bill to everyone:

      Treasury reminder.

      Dear fellow citizen.

      These last few years have been a marvellous adventure, where one challenge after another has been overcome.

      Now it is time to pay.

      Your participation has totalled $xxxxxx,xx

      We thank you for the expediency of your payment. If for any reason you think you have been overcharged and that part of the amount withdrawn should be returned to your account, please think again.

      Sincerely,

      The Management

      • Johno
        Oct 2, 2018 at 3:12 am

        Brilliant, Crysangle! You should write a book!

        • Crysangle
          Oct 2, 2018 at 10:47 am

          Thanks. I was told once , but for now, and apart from some usually unfinished private essays, I like comments because it is much more interactive :-) + there is the question of time. Until I actually find the theme of the story to express what I have to say, which itself is still evasive and probably why it needs a book to give it definition, well I guess the rest is a form of practice and learning…a bit like running the gauntlet sometimes but it sure gets you into shape.

      • roddy6667
        Oct 2, 2018 at 10:00 am

        That letter should include a coupon for a discount on K-Y Jelly.

      • sierra7
        Oct 2, 2018 at 1:15 pm

        Dear Treasury:
        My bank account was hacked. It wasn’t me that spent that money. It was those “no-accounts” across the railroad tracks.

  4. Lenz
    Oct 1, 2018 at 8:35 pm

    So lower margins, increasing wages and the backdrop of ever higher rates?

    I would have thought the US Gov would have made plenty of revenue from property prices.

    • Paul
      Oct 2, 2018 at 6:50 am

      You are correct, the government rakes in capital gains taxes during asset bubbles.

      However, only about 50% of households pay any net income tax (inclusive of the EIC welfare payment).

      • Gershon
        Oct 2, 2018 at 6:29 pm

        Imagine how much better governance we’d have if the only people who got to vote are those who paid more into the system in taxes than they take out in benefits.

    • Phil
      Oct 4, 2018 at 9:06 pm

      The U.S. federal government collects very little in property taxes. Property is taxed at the local government level.

      And those who claim half the people in the country pay no income tax are ignoring the fact that taxes on income are much less than half the funding going into the federal, state, and local governments. When you include payroll taxes, sales taxes, property taxes, and excise taxes, the tax burden in the U.S. is very proportional.

      The bottom 20% earned 3.5% of the nation’s income and paid 2% of the nation’s taxes (an effective tax rate of 16%). The top 1% earned 20% of the nation’s income and paid 23% of the taxes. See: https://itep.org/10-things-you-should-know-on-tax-day-2/

  5. Counterpointer
    Oct 1, 2018 at 8:42 pm

    A recipe for chaos. QT is well under way, so it’s no wonder that some auctions go awry, as in last week’s 5Y issuance. Effective demand evaporated. Non-comp allocation was only $38m of $38b, btc and trailing yield were awful. Some commentary suggests PDs were waiting for the FOMC statement. This sounds like an expedient explanation.

    By the way, the Fed has no idea of the quantum of currency in circulation.

    https://www.federalreserve.gov/releases/h41/current/

    How that plays in to M2 stock and velocity is quite a perturbing matter. It just looks, to the simple-minded like me, that the entire data edifice is built on serial correlation and error. Nice way to manage a global reserve currency.

    C

  6. RepubAnon
    Oct 1, 2018 at 8:52 pm

    Not to worry, the Republicans will eliminate Social Security, Medicare, and all the rest of the social safety net – and blame Democrats. When it all comes crashing down, it’ll be grim times.

    • 2banana
      Oct 1, 2018 at 9:33 pm

      When America defaults – those programs will default by definition.

      There is no lockbox.

      • Paul
        Oct 2, 2018 at 6:55 am

        Not as long as we use a fiat currency that can be created effortlessly and in infinite amounts out of nothing.

        • sierra7
          Oct 2, 2018 at 1:19 pm

          There you go! The charade will continue until confidence is trashed. “Perception is 99% of reality”. The financial world today is a mirage built on smoldering paper.

    • Anon1970
      Oct 2, 2018 at 4:23 pm

      The government does not have to eliminate the programs to cause a lot of damage. Merely by not adjusting the levels at which Medicare premium surcharges kick in will cause a growing number of seniors a lot of financial hardship. Allowing Social Security benefit increases to seriously lag the inflation experienced by many seniors will also cause pain.

      • RagnarD
        Oct 2, 2018 at 5:10 pm

        Right.

        Everyone will get their check with the expected numbers on it. It just won’t buy what they thought it would.

        It such an easy path, how can the government not take it?

        • AndyO
          Oct 4, 2018 at 12:14 am

          Agreed, that is precisely what will happen.

  7. PMalone
    Oct 1, 2018 at 8:59 pm

    Just in time for the decline of the dollar as the worlds reserve currency…

    Rates will spike leading to a crash/recession forcing the Fed into another round of QE to buy the debt from the UST..

    If there’s one ledger you don’t want to be stuck on it’s the USD.. own anything but USD… anything!

    • economicminor
      Oct 2, 2018 at 6:23 am

      you suggest that there is another currency that is stable or solid?

      All asset classes have issues. Some have storage and or security costs. Others have holding costs like property taxes and maintenance. Many are just outright gambling with no real underlying value.

      Just where/what is it you think is a safe asset to hold? The Rupie, the Ruple, the yuan, the yen, the euro? The Frank? PM’s, king copper or is is real estate?

      From what I see and read, this is global and all assets are correlated. Maybe farmland on Mars is the best bet.

      • RagnarD
        Oct 2, 2018 at 5:17 pm

        Well, see Wolf’s recent piece on gold / diversification.

        Agreed, everything is correlated in the everything bubble. Except gold.

        Because as Jim Grant says, the vaule of gold is:

        1/ confidence in the USD

        Thus,when confidence in the dollar plummets, gold will rocket.

        Until then, it will remain uncorrelated / unprofitable.

        • economicminor
          Oct 4, 2018 at 2:05 pm

          I think gold is also correlated in that 1/ there is a gold ETF that has puts and calls and shorts and longs. 2/ The big financier have been shown to manipulate its price along with silver. 3/ it is a commodity and many of the miners are heavily indebted.. 4/ and the biggest one, when the market sells off hard, people will be selling any asset that has value to keep from going under and gold will be sold hard.

        • RagnarD
          Oct 5, 2018 at 9:54 am

          I don’t follow:
          How does manipulation by JPM = correlation.
          And the ETF with put /calls, etc, how does that = correlation?
          And indeed, if people choose to sell gold during the next crisis, then it will correlate in a down move. But so would anything that was sold at the time. The question is, for how long will people be sellers and will it be a wise thing to do at the dawn of a global sovereign debt crisis? I’m guessing not.

          And actually, isnt’ the argument that it is not a commodity? They stock (amount of gold in storage) to flow ratio is unlike any commodity. If it doesn’t walk / look like a duck, it’s not a duck, no?

  8. THE MAN
    Oct 1, 2018 at 9:30 pm

    one word… INFLATION

    It’s the only way out. Something like the 1970s. 10% a year will solve this in no time.

    • Edwin
      Oct 1, 2018 at 9:40 pm

      Inflation of that nature will be a last resort. Those with the most money do not want to deflate its value out of existence.

      • THE MAN
        Oct 1, 2018 at 11:49 pm

        Rich people are concerned about this. But truly wealthy people own assets and are most concerned with relative position. The amount of wealth they have is absolutely stunning and their biggest problem is figuring out what to do with the never ending river of income every month. Inflation or deflation is no matter to these types. They employ family offices to figure out the details…

    • ewmayer
      Oct 1, 2018 at 10:46 pm

      Japan’s government debt is well over 200% of GDP and they have had persistently “worrisomely low” inflation for years and years. Can THE MAN explain that?

      Also, if one totals up all the official and unofficial war spending (DoD, all the spy agencies including estimated black budgets, all the “overseas contingency operations” slush-money spending) it comes to around $1 trillion per year, so Trump’s inane tax cuts aside, if you want the answer to “where is the money going” for those $trillion-a-year deficits over the past decade, you can just say “all the best warmongering and defense-contractor-enriching fiat money can buy.” Hey, all that “shock and awe”-p0rn that gets celebrated by the MSM, complete with special martial musical themes the various news outlets have paid to have composed for their “we are bombing the hell out of some poor bastards somewhere” special-alerts … all that “we are the exceptional empire”-ing, that costs money, OK?

      • THE MAN
        Oct 2, 2018 at 8:29 am

        One word… POPULATION

        Google ‘population of japan’ and you will have your answer.

        • ewmayer
          Oct 2, 2018 at 2:35 pm

          You do like your “one word” non-answers, don’t you? So how does stable population prevent money-printing inflation? If anything it should be the opposite – stable population means low-to-zero GDP growth, thus govt money-printing doesn’t automatically get wholly-or-partially canceled by a growing denominator, thus debt/GDP ratio rises even faster, so the resulting inflation should be even worse than in a country with a growing population like the US, right?

          We mere mortals await your next oracular “ONE WORD” answer, o wise one!

        • RagnarD
          Oct 2, 2018 at 5:27 pm

          C’mon Wolf, help out THE MAN!

          You have to have a single Japanese word that explains why their economy hasn’t yet imploded.

          I mean, You took a course in Japanese for a few months, 20 years ago, right?

          :)

        • Oct 2, 2018 at 7:03 pm

          RagnarD,

          The Japanese economy won’t implode. Its currency might. But not anytime soon. So don’t hold your breath. Japan has a lot going for itself that the US lacks, including a huge trade surplus, large foreign exchange reserve, and the highest GDP per working-age-person in the world. As long as they can keep the currency under control, they’ll be fine. And they know that too :-]

  9. Wendy
    Oct 1, 2018 at 9:42 pm

    I see no reason why we can’t continue to kick the can for at least the next 10 years.

    There are only three ways to lower debt.

    1. Raise taxes
    2. Cut spending
    3. Print money (inflation)

    If you are a career politician, and want to get re-elected, which one do you choose? Hmmmmmmmm, let me think about that. Need to get re-elected, let’s see……..

    • Steve Graves
      Oct 1, 2018 at 10:43 pm

      With rates rising, however, the plot may thicken well before the next decade is out. What will be the reaction when we’re squandering a trillion dollars per year in interest? That may be be too large of chunk of our budget to ignore.

      • Oct 2, 2018 at 1:10 am

        Interest “earned” by the central bank goes to the treasury (this is true in all the central banks I can think of, even in Europe). In effect, any debt held by the central bank is monetized. Japan has shown that this monetization of debt can kick the can down the road for a long time.

    • Harvey Cotton
      Oct 2, 2018 at 1:04 am

      There are several more options. The government does have assets is could sell. It could spin off the Post Office, for example, or privatize federally held land.

      It could also selectively default, for example on the I.O.U.s the Social Security Administration is holding for the money used to fight the Vietnam War and for the Great Society.

      • Nate Wright
        Oct 2, 2018 at 4:40 am

        Privitazation of public assets (asset stripping) has been part of the game plan all along I figure. Look at it like a hostile corporate takeover by the plutocracy.

      • Paulo
        Oct 2, 2018 at 8:18 am

        yeah,

        Like Greece, just figure out a way to sell off Federal gems to rich insiders who already filled their pockets to overflowing for 25 years, then continue to demonize the general population, in particular pensioners.

        Here’s an idea, pass a law stating that such assets can only be sold to pension plans for benefit stability. The same law could limit the salary levels of pension directors, trustees, and set rates for payouts.

      • Ambrose Bierce
        Oct 3, 2018 at 4:12 pm

        The only thing government can sell is deregulation. The Post Office is worth less than Sears at this point. The problem is liabilities, and you can’t sell them. Look at the dollar in your pocket and what it represents. Any rational being would burn the evidence before the debt collector starts checking your pockets.

        • Nate Wright
          Oct 4, 2018 at 4:55 am

          Right. via WaPost article…

          “The total purchase price value [of USPS land] comes to about $27 billion, but since many of these buildings were bought decades ago [in the middle of most towns] , their fair market value is presumably much, much higher.”

          Sears Holdings market cap is around $105M currently.

  10. Steve Graves
    Oct 1, 2018 at 10:27 pm

    “Even after the Great Recession was declared over and done with, the gross national debt increased on average by $954 billion per fiscal year from 2011 through 2017.

    This statement leaves out enough pertinent detail to be potentially misleading. It fails to point out, for example, that deficits under the prior administration had been declining since 2011, dropping below $500 billion in 2015 (downright frugal!). Given this blatantly quantitative trend, Trump’s latest $1.27 budget shortfall is extra staggering, especially for an allegedly conservative president!

    Where are all the GOP budget hawks now? Their grotesque hypocrisy is enough to boil the blood!

    • Oct 1, 2018 at 11:45 pm

      You’re talking about “deficits.” But in the sentence you cited, as in most of the article, I was talking about “increases in debt.” Apples and oranges, as I explained at the bottom of the article.

      When it comes to these “increases in debt,” the annual numbers were distorted by the debt ceilings; in one fiscal year, most of it was hung up in the debt ceiling, and a month into the next fiscal year, the debt ceiling was lifted and the debt spiked by a huge amount (see chart). So the first year, the increase in the debt is minimal, and the second year, the increase in the debt skyrockets because it essentially covers two years. That’s why I use averages in terms of the “debt increases.”

      I didn’t talk about the “deficit” until I got to the part that begins with, “For the first 11 months of fiscal 2018, …” toward the lower third. As I explained, the “deficit” is essentially a bogus number due to the way government accounting works (fails to work).

      The distinction between “deficit” and “debt” and “increases in debt” is really key: the CBO’s estimate for the “deficit” in fiscal 2018 is $895 billion. The actual “increase in debt” in fiscal 2018 is $1.27 trillion.

    • ewmayer
      Oct 2, 2018 at 2:32 am

      Here are the historical numbers for total debt outstanding (i.e. without the public-versus-intragovernmental-holdings BS used for the headline numbers) from the UST website – I’ve started with 2007, i.e. the onset of the “new normal” $trillion-a-year deficits, and supplemented with the 9/28/2018 numbers (which should end up being listed as the 9/30 ones in the historical data, as 9/30 was a Sunday) for the end of the last FY. I’ve rounded the annual-deifcit numbers to the nearest billion. (Sorry, don’t know how to format a table like this to get cols to line up properly using the comments-system here).

      Even giving Obama the benefit of the doubt and fosusing only on his 2nd term (i.e. post-GFC), even with the crazy Trump tax giveaways the numbers for the first 2 Trump years are immaterially different than the first, middle or last 2 years under Obama:

      Date Total debt oustanding Previous-year deficit
      09/28/2018 21,516,058,183,180.23 1271 $Bln
      09/30/2017 20,244,900,016,053.51 671 $Bln
      09/30/2016 19,573,444,713,936.79 1423 $Bln
      09/30/2015 18,150,617,666,484.33 327 $Bln
      09/30/2014 17,824,071,380,733.82 1086 $Bln
      09/30/2013 16,738,183,526,697.32 672 $Bln
      09/30/2012 16,066,241,407,385.89 1276 $Bln
      09/30/2011 14,790,340,328,557.15 1229 $Bln
      09/30/2010 13,561,623,030,891.79 1652 $Bln
      09/30/2009 11,909,829,003,511.75 1885 $Bln
      09/30/2008 10,024,724,896,912.49 1017 $Bln
      09/30/2007 9,007,653,372,262.48
      But yes, the “GOP budget hawks” are well known to be chickenhawks when it comes to $ for their pet stuff, and both parties trip all over themselves when it comes to funding moar war and giving the Pentagon spendthrifts even more than they ask for every year. Spirit-of-bipartisanship budgetary hypocrisy, dontchaknow!

  11. Petedivine
    Oct 1, 2018 at 10:32 pm

    The problem is that 40% of GDP is directly related to government spending. From that 40% there is a trickle down effect into other supporting businesses and their economic contributions to the economy. Cut government spending and you get a corresponding cut in GDP, employment, and tax revenues. Cutting government spending creates a greater need for social services and cuts tax revenue. As we’ve seen in other financially distressed economies cutting government largess creates great pain and dislocation that reverberates throughout the nation.

    • Bobber
      Oct 2, 2018 at 10:12 am

      So you are saying spending increases pay for themselves? It sounds familiar to the argument that tax cuts pay for themselves. Both seem like fantasies.

      In reality, there is a balance or relationship that must be maintained. Tax revenues must be enough to pay for the spending. You can’t look at just the revenue or spending side.

    • RagnarD
      Oct 2, 2018 at 5:39 pm

      Funny.
      Remember what GDP stands for:
      Gross domestic PRODUCT. What a misnomer that is, if 40% of it is govt spending!

      Yes, if you decrease part of that 40% some people will feel a lot of pain. But no doubt the actual product(ion) of the USA will greatly increase. So don’t cry for a falling GDP that is 40% govt spending

  12. MCH
    Oct 1, 2018 at 11:22 pm

    Somehow you must have missed the memo, these days we are all about Congressional hearings and soap opera on Capitol Hill, where old white guys scream they will not shut up and the progressives want to be like White guys and have their Spartacus moment.

    Literally if they had an earthquake that leveled DC, within a week, our representatives will be back strutting their stuff in front of the camera. It’s just so sad how low we’ve gone.

  13. James
    Oct 1, 2018 at 11:24 pm

    But how does it matter? Just keep issuing treasury bills with some far away maturity date. Someone will keep buying them.

  14. Flying monkey
    Oct 2, 2018 at 1:25 am

    The current growth is just financed with the funny money from debt.

    People are enamored with the great economy when it is just being pumped up by all the debt.

    • Saltcreep
      Oct 2, 2018 at 4:45 am

      Yeah, it’s all pretty silly, really. In our desperation to maintain an unsustainable momentum and avoid making painful adjustments in the present we’ve been piling on the debt in ever greater amounts in order to drive our pace of consumption and destruction at ever higher rates, and thereby ensure even more painful adjustments in the future.

    • economicminor
      Oct 2, 2018 at 6:35 am

      My personal spending (my personal gdp) would go up dramatically if I borrowed like the government and our corporate *leaders* do!

      As the GDP really only represents how much we spend, it is a completely flawed representation of how much actual productive income we make.

  15. Mean Chicken
    Oct 2, 2018 at 2:16 am

    The magic of compounding interest should do the trick.

  16. amigauser
    Oct 2, 2018 at 3:37 am

    Debt will only be a problem, when America cannot issue it in its own currency, and when oil is not priced in dollars.

    • sierra7
      Oct 2, 2018 at 1:30 pm

      By then we will be eating Soylent Green and the Soylent Green economy will be dominated by “dollars”! ….(Sarc)

    • RagnarD
      Oct 2, 2018 at 5:46 pm

      Right! How about a “Net GDP” number?

      What a joke worrying about correcting for inflation (real gdp) when you’re ignoring the $1T of debt you just piled on.

      Oh, the stories we tell ourselves.

    • RagnarD
      Oct 2, 2018 at 5:51 pm

      America will always be able to print USD and oil will always be priced in USD. You can also price it right now!! in VZ bolivars. What matters is if people, including Americans, keep accepting USD as payment for goods. What super power do you think America has to make that go on for the next 5, 10, 20, 30 years?

  17. Colin
    Oct 2, 2018 at 4:50 am

    Suicide rate up and birth rate down. 21% unemployment according to Shadow Stats. Most Americans can’t afford a $1,000 emergency. A lot of low paying and part time jobs. Good times baby. Wealthy people think it’s good times, while every person in the middle class that I know disagrees.

  18. nicko
    Oct 2, 2018 at 4:55 am

    It may sound trite, but the only solution is more globalization.

    • Paul
      Oct 2, 2018 at 7:03 am

      I would say the opposite.

      Should have started high tariffs about 1960, and increased them as high as needed on everything other than raw materials and energy to keep Americans buying stuff made by other Americans.

  19. Kent
    Oct 2, 2018 at 5:56 am

    The people voted for a Republican president and Congress. This is the will of the people.

    • Setarcos
      Oct 2, 2018 at 6:59 am

      @Kent the run rate is +33%, but look again at the years on the chart above and consider your comment. Basically $1T a year, year after year.

      At least we have employed taxpayers (unemployment 4%) …both deemed impossible very recently.

      • Unamused
        Oct 2, 2018 at 8:01 am

        ->At least we have employed taxpayers (unemployment 4%) …both deemed impossible very recently.

        And if you look through the fog you can see it’s still impossible. Hence the need for more fog.

        The hard and bitter truth is that many people prefer warm soft lies.

        • Setarcos
          Oct 2, 2018 at 8:07 am

          A few years ago I asked a well known economist what would it take tomget GDP back to 3%. He laughed and said we would never see 3 % again.

          Unamused, Apparently I am missing something. Enlighten me.

        • Unamused
          Oct 2, 2018 at 8:31 am

          ->Apparently I am missing something. Enlighten me.

          You’re missing an appreciation for warm soft lies for what they are. You don’t really believe the 4% unemployment number, do you?

          The unemployment rate for an antebellum cotton planation was zero, so the US still has a way to go.

        • Setarcos
          Oct 2, 2018 at 9:14 am

          @unamused Employment statistics are minimally correct on a relative basis. The labor market in the US is much tighter – that is for certain. And workers pay taxes and the benefit to the deficit and debt is 1. paying taxes as opposed to 2. consuming tax revenues (or debt).

          Your plantation reference is interesting. I chose the working corp version as opposed to the state version. The food and self esteem are better and fear is lessened.

          Fear => Anger => Hate => Darkness

    • Unamused
      Oct 2, 2018 at 8:23 am

      ->The people voted for a Republican president and Congress.

      Almost half of them. The rest still resist the propaganda. Republicans can just sit tight until their Russian and other foreign friends hack the next election for them. Won’t the blue wave Democrats be surprised.

      Then they’ll finally have enough support for a new constitutional convention of corporations. Your gangster capitalist job creators will finally get the government they really want and will no longer have to settle for sneaking inadequately profitable laws through.

      In the new corporate utopia your all problems will be over and you will finally be able to live happily ever after to the end of your days.

      • Ambrose Bierce
        Oct 3, 2018 at 4:06 pm

        Amazons minimum wage is now twice that of the Federal minimum wage? What’s next? Labor Unions arguing for wage cutbacks and smaller benefit packages and less onerous environmental rules? Amazon might be able to automatically remove felons and heroin addicts from the resumes they receive but Henry Ford had the same idea as I recall, making the workers by extension, consumers of their own products.

    • Unamused
      Oct 2, 2018 at 11:48 am

      ->Texas resembles South Africa where the white minority controls everything to the exclusion of the majority.

      In a democracy, voters choose their representatives. In whatever it is the US has going, politicians choose their voters.

      For nearly all Americans, survival now largely depends on selling your soul as cravenly as possible in the deperate attempt to get a halfway decent price for it. Abject failure is common.

    • Unamused
      Oct 2, 2018 at 12:02 pm

      ->Only 50% participate in a presidential year and only 25% in a mid term year.

      If the gods had meant for you to vote, they would have given you candidates.

  20. timbers
    Oct 2, 2018 at 6:11 am

    “US Gross National Debt Jumps by $1.27 Trillion in Fiscal 2018, Hits $21.5 Trillion”

    But Jerome Powell told us the solution. All we need to do is listen, and then you will hear it:

    As that firmly reality based dude at the Fed pointed out to us recently – Jerome Powell – we just need to cut mostly already funded social benefits like Medicare, Medicaid, and I’ll go out a limb here and but a few words into his mouth – Social Security, too.

    According to the Oracles at the Fed, programs like this that a fully funded (when properly managed) are what is causing all these deficits. That’s why we must worry about them and cut/eliminate them now so we give Jerome’s Ultra Rich Friends and Rich Gigantic Corporations (our True Gods) more tax cuts and also fund our multi-trillion dollar Dept of War & Aggression – those programs have allay been fully funded too with Trust Funds so the never ever contributed to the deficit.

    • Max Power
      Oct 2, 2018 at 6:32 am

      I wouldn’t necessarily read Powell’s comments that way.

      He spoke of the “uniquely expensive” US healthcare system. You know what other feature of the American healthcare system is unique among all advanced countries? The fact that it lacks compulsory universal coverage. Seems to me he is hinting that the US needs to move in the direction all other countries have long been headed on this issue – and that would involve more government involvement in the matter, not less.

      • Paul
        Oct 2, 2018 at 7:08 am

        I have read that 40% of healthcare costs are incurred in the last 90 days people live.

        Further, the ratio of “administrators” involved compared to the number of actual healthcare providers (like doctors) has skyrocketed with layer after layer of bureaucracy (insurance companies primarily) involved.

        I can remember when most people went to see their doctor, paid his book keeper/secretary cash on the way out the door, and that was the end of it.

    • Oct 2, 2018 at 8:51 am

      Timbers, you completely misread Powell’s comments and invented your own moronic conclusion. He said, to repeat for your edification:

      “So I would just say, it’s no secret, it’s been true for a long time, that with our uniquely expensive healthcare delivery system and the aging of our population, we’ve been on an unsustainable fiscal path for a long time.”

      He didn’t say that the government should cut healthcare or the aging population. What he said was that both are a drag on the productive economy going forward and make it harder to deal with the debt. This “uniquely expensive healthcare delivery system” (much of it in the private sector) eats up close to 20% of GDP. This makes it hard to have money left over to deal with the debt.

      His solution is a reduction in the GOVERNMENT DEFICIT!

  21. Top-GUN
    Oct 2, 2018 at 6:32 am

    Wolf,, I’d love to see you comment on this
    Debt – Deficit = Off Budget Borrowing
    $1.27T – 0.895T = $0.475T
    and what is that money spent on, or where does it go????
    I believe this is money the general fund borrows and then gives to the SS, Medicare and Medicaid programs as they redeem money (special IOU’s) they lent to the general fund over many years. And they are redeeming those IOU’s because they are taking in less than they are spending.

  22. JIT Hoong LIM
    Oct 2, 2018 at 6:40 am

    Federal debt / GDP has remained steady at 105% so the increased in debt is not so much alarming as it sounds. Though corporate receipts have plunged, corporate profits have jumped,…will see how that pans out on the personal consumption side. Maybe supply side economics might work after all!

    • Oct 2, 2018 at 9:01 am

      It’s not working:

      Fed gov spending: +7%
      GDP (nominal): +5.4%
      Fed gov tax receipts: +1%

      Tax receipts are not even keeping up with inflation (near 3%); and spending rises far faster than GDP. This is completely dysfunctional from a fiscal point of view. With economic growth like this, the budget should produce a slight surplus, so that when the economy slows it can go into deficit mode.

  23. Danlxyz
    Oct 2, 2018 at 6:41 am

    So where did all of this $1.27 trillion go? If it went to goods and services provided by the government, it would increase GDP by that amount. But GDP is only forecast to increase by 3.1% or $600 billion ( 2017 GDP of $19.391 trillion x 3.1%)

    My numbers may be off because different sites have different numbers.

    • Paul
      Oct 2, 2018 at 7:11 am

      Actually, your numbers are off because you have the concept completely wrong.

      It is only the INCREASE in spending from one year to the next that contributes to increased GDP.

    • Unamused
      Oct 2, 2018 at 7:55 am

      ->So where did all of this $1.27 trillion go?

      Asian countries with ‘compliant’ governments (desperately poor and devoid of regulation), but mostly overseas tax havens. Your tax dollars at work, defraying the cost of offshoring. Federal incentives, you know.

      Every trillion represents more tens of billions in rentier profits. They like deficits and debt, the more the better. And more pressure on the toiling masses, like squeezing toothpaste from a tube.

      The wealth transfer continues. It is not being transferred to, well, you, for example. The US economy is being liquidated, and naturally one limits investment in cash cows. Besides, it costs a lot to garrison the planet, so the infrastructure will not be fixed, at least not in the US.

      Half the country has been economically repressed rather severely and supports these programs to ensure the other half is also repressed. US politics is largely driven by spite, malice, delusion, and deception, all happily cultivated and exploited by avarice. USA USA!

      • THE MAN
        Oct 2, 2018 at 8:23 am

        This is true for a very small portion. Most of it goes towards paying for things domestically. Public and private. Every mortgage in this country is subsidised and is ultimately paid for via debt. Military, federal spending, federal programs paid to states. The list goes on.

        So, in short, it pays for the lifestyle that you and I enjoy. But go ahead and blame people who look different if that makes you feel better…

        • Unamused
          Oct 2, 2018 at 8:52 am

          ->So, in short, it pays for the lifestyle that you and I enjoy.

          You don’t speak for my lifestyle, Man.

          Statistics suggest most Americans don’t enjoy their lifestyles very much at all, mostly because their job is to pay for yours.

    • Oct 2, 2018 at 9:10 am

      A couple of things:

      When you compare debt to GDP, you need to use “nominal” GDP (not adjusted for inflation, because the debt is not adjusted for inflation either) to get apples and apples. Nominal GDP is growing at over 5%, going close to 6%.

      Not all government spending contributes to GDP (such as interest payments and social payments that people don’t spend). What goes directly into GDP are the goods and services the government buys (vehicles, supplies, computers, tanks, healthcare) or invests in (infrastructure, etc.).

      • Danlxyz
        Oct 2, 2018 at 10:11 am

        OK, thanks. Using 5.4% for GDP growth and adding interest paid on $20 trillion would account for the missing amount.

        It does make me wonder if there really much “Growth”. It looks like a lot was just borrow and spend.

  24. THE MAN
    Oct 2, 2018 at 8:13 am

    In the United States we live in a magical delusion where reality is disconnected from facts. It’s funny to see politicians talk about American Exceptionalism and the American Dream. It’s even funnier (and scary) when you meet people who believe this nonsense. As if Americans have some special claim on wanting what’s best for themselves and their families.

    This article gets to the heart of this delusional thinking. We are truly exceptional with applying economic and military imperialism. The system of debt the world is forced to use at gunpoint is what allows this charade to continue.

    One example is your mortgage. If you have a 30 year fixed rate mortgage it is a direct result of this system (borrow for 30 years at 4%! What a deal!) This is no where near the market price of this risk; other countries don’t even offer the product. So how is this possible? (Hmmm…. American Exceptionalism?)
    The risk is packaged up, sold off, cut up, ‘hedged’ and everything else you can imagine. But ultimately the risk resides with the US govt and is stuck on the balance sheet which never balances. Nothing is free and ultimately it is ‘balanced’ through debt and deficits which are financed by the rest of the world through coercion or other threats of retaliation. This is the American Dream folks and the whole world participates… willingly or not.

    This article is proof positive of how the system works and why we shouldn’t buy the BS.

  25. Gorbachev
    Oct 2, 2018 at 8:13 am

    The buck is the worlds reserve currency backed by the greatest

    military the world has ever known.It owes most of its money to

    itself.America could print ,pay all of its debt to itself and still be

    the worlds reserve currency. No worries .

    • Unamused
      Oct 2, 2018 at 8:38 am

      ->It owes most of its money to itself.

      Exactly. The 99% owes most of its money to the 1%.

      • Gorbachev
        Oct 2, 2018 at 2:26 pm

        Suddenly I’m depressed

    • economicminor
      Oct 2, 2018 at 12:26 pm

      World currency is also a function of size.. and of a legal system that works. If you write a contract in US$ you can enforce it. There just aren’t any other places in the world where you can trust their legal system where the size of their economy is large enough. Great Britten was large enough when it was the English Empire but not now.. The Euro isn’t even big enough. Few trust the Russians and their economy isn’t big enough… We all know the way that China balances its accounts. So who or where can International Business go to write and enforce its deals? There is no alternative.

  26. Sneaky Pete
    Oct 2, 2018 at 8:53 am

    I care more about the Fed’s balance sheet than I do the government’s. That’s because I’ve saved lots of Fed I.O.U.’s. But the gov’t insists the Fed screw me every time it overspends so I feel I have both working against my economic success. Multiply that by a lot of people and “Houston, we’ve got a problem.”

    As they say, most longstanding empires rot from within. Things will get better again after we collapse.

  27. safe as milk
    Oct 2, 2018 at 9:09 am

    not surprising, since democrats and republicans alike overwhelmingly voted to increase the military budget to over $700 billion. if the war mongers don’t get us all killed first, they will surely bankrupt us.

    • Unamused
      Oct 2, 2018 at 10:13 am

      Two trillion and rising. $700 billion is after the accounting tricks. Google up ‘two thirds on defense’, remembering that costs have gone way up since then.

      Forever wars against hordes of straw men will cost more than your descendants will ever be able to pay, try as they might, but they are infinitely profitable if you have the right connections. Infinitely more than the $20 trillion that nobody can account for.

  28. MD
    Oct 2, 2018 at 10:23 am

    The cost of eternal, unwinnable war against constantly shifting, nebulous enemies (ref: ‘1984’, Orwell, G., 1948), mass deindustrialization and a obscenely wealthy elite – both individual and corporate – that won’t pay its fair share into the commonwealth (having convinced the political class that the provision of jobs is an altruistic act…) = 21 trillion and rising.

    • MD
      Oct 2, 2018 at 10:27 am

      PS to add plus a president who laughably thinks that the measure of a country’s economic prosperity, is the level of an index on it stock market.

      The position of a squiggly lime on a computer screen which is the result of nothing more than rampant speculation predicated on cheap credit.

      Laughable, dangerous and tragic in equal measure.

  29. Memento mori
    Oct 2, 2018 at 10:44 am

    Judging by Japan’s experience, this baby has a long long way to go.
    Then if Argentina can issue 100 year bonds….
    I wish we had it written in the constitution a balanced budget clause, government can’t spend more then they can take in in taxes, expect in times of war.
    But we like our free lunch, who cares for the future generations. Yet our immorality and arrogance in enslaving with debt people that are not born yet makes me uncomfortable.

    • Unamused
      Oct 2, 2018 at 11:31 am

      Nothing so pleased the politicians as the discovery that they could buy elections with money stolen from people who can’t vote because they haven’t been born yet.

      Hopefully, future generations will be able to get good jobs and pay all it back, after the rest of the economy has been offshored and despite their crushing student debts. And if not, they will have no one to blame but themselves for so irresponsibly choosing bankrupt parents.

      People have been suckered into believing that Tax Cuts for the Obscenely Wealthy pay for themselves for two generations now, which definitively proves that capitalism is the extraordinary belief that the nastiest of men, for the nastiest of reasons, will somehow work for the benefit of us all.

      • kitten lopez
        Oct 3, 2018 at 10:56 am

        along with… “Statistics suggest most Americans don’t enjoy their lifestyles very much at all, mostly because their job is to pay for yours.”

        WOW…who are you???

        nevermind. don’t answer. i already fear for Wolf the more he shows his outrage on “just” a “money site.”

  30. Mr. Knoss
    Oct 2, 2018 at 10:55 am

    Apple to Apples comparison. Apple’s market capitalization is 1/21’th of the outstanding public debt.

    Books have been written, the authors are all dead, warning of the uncontrollable public debt…

    Books get sold, that’s all that happens.

  31. Ted Freeman
    Oct 2, 2018 at 10:59 am

    These are the Boom Times because of deficit spending, both public and private. Aren’t your friends and neighbors who are deepest in debt more fun to be around? At least while the debt party is still going on, that is.

  32. Gene
    Oct 2, 2018 at 11:06 am

    Anyone who read Paul Samuelson’s “Economics” in college knows that we should not be ringing up such large deficits in boom times. Government expenditures should have been cut back, not increased. We didn’t need to increase “defense” spending by $50B when we were already spending far too much. We didn’t need the cutback in corporate taxes. We certainly don’t need more entitlement programs.
    But what could have been realistically expected from Washington? Turn on TV, what passes as the “news,” and it is clearly evident that we’re being governed by craven, opportunistic, political hacks of one stripe or another. It’s a miracle that we have any good people at all left in DC. Will the last sane politician to leave please turn off the lights?

    • Anon1970
      Oct 2, 2018 at 11:37 am

      In boom times, we should be running surpluses. But we have not done that since Bill Clinton left office. As Herbert Hoover once said, “Blessed are the young, for they shall inherit the national debt.”

    • Wisdom Seeker
      Oct 2, 2018 at 2:15 pm

      Samuelson’s book was written under a gold standard monetary system. Since the 1970s we haven’t been in that system anymore, although it has taken a couple generations for people educated in the prior economics to realize that this changes everything. At least until people lose faith in today’s full-faith-and-credit (but no gold!) money system.

      So, in the 1980s the fiscal hawks said the doves believed in “tax-and-spend” policies.

      The the 2000s the hawks complained about “borrow-and-spend” policies.

      Then we got QE, which was print-and-spend policy.

      Now it seems we just have a spend-and-spend policy…

  33. lenert
    Oct 2, 2018 at 11:17 am

    “I’m the king of debt! I love debt! “

  34. Ambrose Bierce
    Oct 2, 2018 at 11:26 am

    The solution (has been for a while) is direct fiscal stimulus. Instead of paying out incentives to corporate America, provide the stimulus directly in the form of tax breaks (which only helps those wealthy enough to pay taxes) or in the form of a check. It’s bound to further? heat up inflation, (solve the interest on the debt problem) and put US GDP at parity? with China. Also to provide a buffer for the global recession when ROW sloowwws down.

    • lenert
      Oct 2, 2018 at 11:55 am

      It IS direct fiscal stimulus but it could have been delivered as a $10,000 check to every US taxpayer.

      • Wisdom Seeker
        Oct 2, 2018 at 2:17 pm

        To partisan politicians, paying ALL the taxpayers is a waste of money. That’s why they spend so much energy trying to deliver benefits only to their own voters.

  35. Escierto
    Oct 2, 2018 at 11:33 am

    Jerome is all talk and no action. Let’s see him raise rates by a full percentage point in December and then do the same four times in 2019. THAT would pull the plug on this farce once and for all. The interest on the debt would skyrocket and suddenly create a crisis which would force the politicians to act. Instead he just flaps his gums like the rest of them.

    • Oct 2, 2018 at 11:40 am

      I would be amusing, of sorts, if you’re watching from a safe distance, but it’s not going to happen. Quarter point is all we’re going to get in Dec :-]

      • Ambrose Bierce
        Oct 2, 2018 at 1:54 pm

        The Fed rate hike policy is to “put a collar on the dollar.” Rising yields on the long end are balanced by rising Fedrates. A steepish yield curve would heat things up? HYG ETF is making new highs so Fedrates are really not walking the walk. WTIC made a new high. TIP ETF broke below its 200ma while yields are rising (reverse correlation). Sticking to Doug Noland periphery to core dynamics. Powell is playing defense.

  36. Pl’n’l
    Oct 2, 2018 at 12:52 pm

    The “Debt Doesn’t Matter” meme can go on for years, if not decades. That said, we can’t know when the ultimate destruction of the currencies involved will take place,,,so, as long the music is playing,,,,,,

  37. LouisDeLaSmart
    Oct 2, 2018 at 12:54 pm

    \\\
    The US is in a unique position in the history of monetary policy, where for the first time a non-gold based currency is king, and it’s strength is projected by means of military policies. In these policies I include economic sanctions, restrictions in dollar trade, confiscation of assets as well as good old raw power. What is very worrisome in respect to this amassing deficit of ludacris proportions, is that the opportunity to build&rebuild is not even considered let alone pursued. Instead they opted to entrenching their internal positions by pushing as much funding as possible into their own projects. They are preparing for the post dollar world.
    \\\

  38. George McDuffee
    Oct 2, 2018 at 2:39 pm

    Excellent article and comments.

    I do however suggest looking at other countries where “austerity” has been imposed to “balance the budget”, either by outside authority such as the IMF, or internally by some version of reactionary neo-conservatism (neo-liberalism outside the US) such as MMacri in Argentina. As far as I can tell, the universal result has been a marked economic contraction, with huge increases in unemployment, poverty, and hunger. and cutbacks in education, public health, infrastructure improvement/maintenance, etc. Examples are Greece, Argentina, Brazil, Spain, Ireland, and a host of African countries.

    It is suggested that just as different types of physics apply as we move from the ultra small to the ultra large, i. e. Quantum physics => Newtonian physics => General Relativity, so to do the economic “laws” (or at least rules of thumb.”

    The transition from micro to macro economics is well known. It may well be that there is an economics past macro (mega?) where the usual shibboleths no longer apply. When you have corporations with gross sales greater than all but a handful of developed nations, and total world debt is several times the world domestic product, it seems reasonable that something beyond the accepted micro/macro economics is in action.

    What these principles might be I have no idea, but then neither does anybody else.

  39. raxadian
    Oct 2, 2018 at 3:57 pm

    The US dollar is a very old scam.

    It was a convenient acam so countries could drop the gold standard but nowadays all it does is give the US money for nothing.

    And despite that, the US debt is so big is ridiculous.

  40. Nick
    Oct 2, 2018 at 5:06 pm

    I like Tommy Tiernan’s idea of dealing with national debt

    https://youtu.be/0v–fTVAWE8

  41. GP
    Oct 2, 2018 at 9:40 pm

    You left out the part of what is contributing to the rise in expenditure. Here, treasury statements might help: https://www.fiscal.treasury.gov/fsreports/rpt/combStmt/current_rpt.htm

  42. Robert
    Oct 3, 2018 at 2:04 pm

    “But wait — these are the Boom Times!” A lot of people, myself included, thought that when George Bush, the first Chief Executive with an MBA, was elected, we would see some business-like cost-cutting efficiencies like scrapping the Boeing 747 jumbo-jet-full of courtiers and psychophantic reporters in favor of a business jet, but it was not to be: Bush increased the national debt by the SUM of all previous debts (!!!).
    A few business bankruptcies notwithstanding, so-called conservatives supported Trump’s presidential campaign in the same hope- he even called Boeing on the carpet for price gouging on defense contracts- but it was all a sham- he wound up giving them a record contract for a new fleet of Air Force Ones and a complete blind eye to additional budget-shredding defense contracts. The new operative business model being Wild Bill Hickock (and who was gonna stand up to him). How did that all work out?

    • Anon1970
      Oct 4, 2018 at 8:16 am

      Bush 43 cut taxes and took the country into an expensive war. You don’t need an MBA to know that these acts were not going to lead to a balanced budget. But they didn’t make him a one term president. In fact, he did better in 2004 than in 2000. Too many “family values” voters put their religious beliefs ahead of their economic well being. Now they have to live with the results. Back in the early 1980’s, David Stockman (Reagan’s first Budget Director) realized that it was much easier politically to cut taxes than to cut spending. Every spending program has its vocal group of supporters but who wants to see taxes go up?

  43. Trena L Bristol
    Oct 3, 2018 at 7:30 pm

    You pick on the government when consumers and corporations are also holding record amounts of debt once again. Average consumer debt is at $38,000 per person outside of mortgages. US Corporations have over 4 trillion in debt. This is the pot calling the kettle black, projection. We live in a hypocracy not a well informed democracy. Moreover, the country’s private debt levels that are even more unsustainable. There is going to be another collapse and uncle sam will have to bail us out once again. This bailout which would likely lead to large inflation the fed can’t control as it has not choice but to print enough money to rescue us once again. We will finally deal with inequality, its called large inflation

    • Oct 3, 2018 at 9:00 pm

      I’m an equal opportunity picker. I pick on corporate debt all the time, and once a quarter at least I pick on consumer debt :-]

  44. Trena L Bristol
    Oct 3, 2018 at 7:52 pm

    I project the following to happen. Spending decreases significantly and people lose their jobs. They file bankruptcy.

  45. GP
    Oct 5, 2018 at 12:55 pm

    “total tax receipts inched up by only $19 billion, or by 1%, according to the CBO, though the economy, as measured by nominal GDP, grew at an annual rate of about 5.4% ”

    Why hung up on that connection? Spending is not calculated as a percentage of GDP. Tax receipt doesn’t need to either.

    Economy doesn’t boom without a catalyst. You can try to ignore the reason, but can’t make it disappear.

    I like your current quote way better than something like “total tax receipts only reduced by 1%, though the economy, as measured by nominal GDP, shrank at an annual rate of about 4%”.

Comments are closed.