Posted on 02/04/2018 9:26:50 AM PST by antidemoncrat
he federal government is on track to borrow nearly $1 trillion this fiscal year — President Donald Trump's first full year in charge of the budget.
That's almost double what the government borrowed in fiscal year 2017.
(Excerpt) Read more at chicagotribune.com ...
Every budget is a stimulus bill now.
How long do they think that’s going to last?
Debt is great! When Dems are in charge. It never ceases to amaze me how they ignored it when the O was there, went into office with 10T in debt left with 20T in debt. Not a word was spoken by them. Now Trump is president. There was a total increase in deficit of 80B over the year before. I guess that’s a big deal. Now...
Exactly. Earth calling Heather Long and the Chicago Tribune! So after 8 years of Obama-Idiot doubling the national debt 10+ trillion.....now its an issues, Chicago Tribune/Heather Long?!! Like where the frak you been the last 8-damn years?
As a comparison, O’s first full year 2009 was 1.4T. Not that anyone in the media cared. The average under Bush was 250B.
FY 2010 - Obama’s first budget created a $1.294 trillion deficit.
FY 2011 - This budget contributed $1.3 trillion to the debt.
FY 2012 - The deficit was $1.087 trillion.
FY 2013 - This was the first Obama budget where the deficit, $679 billion, was less than $1 trillion. Thank sequestration, which forced a 10 percent cut in spending.
FY 2014 - The deficit was $485 billion.
FY 2015 - The deficit fell further, to $438 billion.
FY 2016 - The deficit rose to $585 billion
O’s lowest was 438B
Am I missing something here? The headline says “an 84% jump from last year”, and in the article, it says “almost double”. Both can’t be right.
It’s a big deal and doesn’t matter who drives up the debt. Trump is no fiscal conservative and that is quite a shame actually. He needs to be driving slashing spending at all levels and push a balanced budget. He needs to forget the koombya infrastructure makes nice with democrats boondoggle. We don’t have 1 trillion to waste away on what the states themselves should be managing. Why the hell do I care about some bridge in any state but my own?
Deficit spending is trillion + and unfunded liabilities are at 300-400 trillion. If we do not have a fiscal conservative hanging the war drums nothing else will make any difference; the tweets, the “winning”, the this or that won’t make a bill of beans. The nation will be sacked
using round numbers, at $20 trillion in debt, times an average borrowing rate of 4% (someone correct me if that’s a bad number), would equal $800 billion in year in government spending, just to pay interest on the accumulated debt from previous presidents.
So, again round numbers, correct me if these don’t make sense, then about $800 billion of the $1 trillion they are concerned about, is needed to pay interest on previous financial obligations.
Why was nothing said by anyone, when Obama presided over lackluster economic growth, and an increase in the debt from about $9 trillion to about $20 trillion?
The debt under Obama increased more than it did under all previous presidents combined.
A little context and history is appreciated, and should be included, if these media folks ever do any fact checking or context.
If the economy grows at 5.4% in the first qtr and commensurately thereafter, this borrowing will be quickly repaid and we should see our national balance sheet begin to improve.
Yeah, you’re not thinking about double right. Double would mean a 100% increase. 84% increase is almost double.
Yep. And before that, Bush did the same thing. Trump will probably come close as well. That is the current path of all presidents. There is no concern for debt. Just like many of the comments leaving out that the GOP had control of spending, during several years of Obama, and the debt still went up. That's the r and d tag team that's destroying America.
outrageous. CUT SPENDING!! STOP FOREIGN BRIBES. Make Americans work again and curtail welfare and unearned tax credits. Get these illegal aliens off out jobs!!
I dont like any spending leading to deficits that in order to offset deficits one must say “if.”
I’d like for once in Goverment’s life to say, “hey guess what? Even “if” we only put up a .5% GDP our budget is still balanced.” Translation- We need Trump to speak fiscal conservatism and balanced budgets. Should Congress? Sure, but I have a feeling Trump will need to lead on this. I cannot recall him ever making a speech or statement about balancing the budget or leading the charge for spending slashing.
The benefit of Reagan tax cuts were neutered by increases in government spending at the same time
bkmk
>>using round numbers, at $20 trillion in debt, times an average borrowing rate of 4% (someone correct me if that’s a bad number), would equal $800 billion in year in government spending, just to pay interest on the accumulated debt from previous presidents.<<
It’s a bad number. The public debt is around $15 trillion (the rest is in intra-government accounts like Social Security) and the interest on that in FY2017 was around $270 billion. That implies an average interest rate on the outstanding debt of around only 1.8%, and that’s a huge problem for the budget since interest rates have nowhere to go but up from there. The reason it’s so low is that short rates have been below 1% for years and the Treasury issued a lot of short debt, plus longer debt they issued was also only at 2 to 2.5% or so for years.
Well, the chickens are coming home to roost now. If they issue a trillion in new debt this fiscal year, they’ll also have to roll over about $4 trillion of maturing debt, most of which was issued at under 1% as Treasury Bills.
So, say rates rise to an average of 2.8% this fiscal year. That 1% will cost 1% of the $5 trillion in debt issued, or $50 billion. Within a couple of years, if rates rise another percent to an average of 3.8%, they’ll be issuing about the same amount but that issuance will add another $100 bn to the interest load.
All of this is manageable if they finally get the budget under control and if that’s the extent of the interest rate rise. But if rates go to, say, 6% on average, then in just a few years we could have upwards of $10 trillion in debt costing 6% per year or $600 bn per year in interest, plus the interest on the debt that hadn’t been rolled over of another $100 to $200 bn, and we start reaching your $800 bn per year in interest.
And, of course, if inflation gets serious and we go to 10% interest rates again, well, we’d better hope that the Treasury has issued a lot of long term debt before that happened, or we’ll be looking at well over a trillion dollars in annual interest costs. As it is, we’ll eventually get to that level anyway if we don’t get spending under control at some point.
More on the outlook for long-term interest rates:
The U.S. Treasury has tried to extend the average maturity of the debt the past few years by issuing longer paper, but the Federal Reserve completely frustrated that effort by purchasing huge amounts of the longer debt that the Treasury issued. That means that the markets weren’t forced to absorb the new long debt. The Fed took it on instead. In fact, it left traditional buyers of longer bonds looking for alternatives which is probably one reason stocks did so well and also why junk bonds are priced so richly today.
Well, the Fed has already announced plans to reduce it’s long portfolio and has stated that it will gradually increase the amount sold every month until it reaches $50 billion per month by the 4th quarter of this year. Meanwhile the Treasury will be issuing about $80 bn a month, much of it longer paper. Plus, on top of that, they’ll be rolling over maturing debt at a rate of about $300 bn a month.
Put it all together and instead of all of the Treasury’s long bond issuance being absorbed by the Fed, we’re going to get $50 bn being sold into the market by the Fed and the Treasury issuing more long paper than ever at the same time.
The impact on long-term interest rates is likely to be the opposite of the impact when the Fed was buying everything the Treasury issued on the long end. The short end, however, will trade close to the fed funds rate, as usual, but that could start to rise at a faster rate too if the economy gets a serious boost from the tax cut.
gee welcome to the game Tribune, you’re only 9 years too late!
“Why the hell do I care about some bridge in any state but my own?”
Because you may drive over that bridge some day?
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