Soaring Deficits and Interest Costs Leave the U.S. Looking Very Fragile
If you take a step back and look at the macro picture of the U.S. economy – it resembles a huge, upside-down, glass pyramid.
Constantly teetering back and forth – struggling with everything it has to keep from collapsing.
And so far – it’s done a good job maintaining its balance. But nonetheless, it’s extremely fragile. And gets more so as each day passes by.
All it needs is a slight push in the any direction and down it goes – shattering into pieces. . .
It’s not hard to see that the ever-growing U.S. deficits – along with the soaring interest costs on the National debt – are going to be the focal point of a worldwide crisis.
Especially over the next few years. . .
To start – the U.S. deficit almost eclipsed $800 billion for the entire fiscal year (which ended September 2018) – a 17% year-over-year increase.
And it’s the largest deficit the U.S. has had in six years.
“Hold up – isn’t the economy doing well? Why’s the deficit soaring?”
See – That’s the problem.
The U.S. is borrowing at levels not seen since the direct aftermath of 2008. When the economy was in shambles.
As usual – government spending greatly outpaced revenue.
U.S. Treasury ‘outlays’ (spending) increased $127 billion compared to government ‘receipts’ (income) of only $14 billion.
That’s a $113 billion more than last year’s deficit.
The main causes for the increased deficit was because of Trump’s Tax Cuts (which brought in less federal revenue). And from soaring spending – which came from Defense/Military, as well as Medicaid, Social Security, and Disaster Relief.
It doesn’t look good – does it. But here’s the worst part – things are only going to get worse going forward.
The Congressional Budget Office (CBO) recently published, ‘The 2018 Long-Term Budget Outlook at a Glance’ white paper.
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