Free Republic

The current federal budget fiscal year still has two months to go, but the deficit is already bigger now than it was for all of last year, and heading to more than $1 trillion. Naturally, the Trump tax cuts are getting the lion’s share of the blame. But the latest data on spending and revenues from the Treasury Dept. make it abundantly clear that it is out-of-control spending, not tax cuts, that are driving the deficit upward. Unfortunately, no one in Washington seems to care. From October last year through July this year, total revenues climbed 3.4%. That’s faster than...

Morgan Stanley analysts said on Monday that they now expect the U.S. Federal Reserve to cut rates in September and then again in October. … snip … The bank joins a number of investors betting that the Fed’s first rate cut since 2008, late last month, will be the first of several moves to lower borrowing costs. Goldman Sachs said earlier this month it sees a strong chance of rate cuts in both September and October.

The massive spending deal, negotiated by Treasury Secretary Steve Mnuchin and House Speaker Nancy Pelosi and agreed to by the president, looks poised to kill off the Budget Control Act of 2011—the law that was meant to restrain federal spending. With that law on the way out, the question arises: Where can fiscal conservatives turn to exert real and lasting fiscal discipline? Thankfully, two members of Congress have introduced a bill to do just that. The Maximizing America’s Prosperity Act—or MAP Act—is a bill proposed by Rep. Kevin Brady, R-Texas, and Sen. Mike Braun, R-Ind., that would limit federal spending...

“This is a tipping point now. If we don’t address it in this window, in this presidential debate, we’re not going to deal with it.” Those are the words of former South Carolina governor and U.S. Congressman from South Carolina, Mark Sanford. Sanford is talking about federal debt.But if one didn’t know better, and if one weren’t familiar with the issues of importance to Sanford, it would be easy to speculate that the South Carolinian who plans to take on Donald Trump for the Republican presidential nomination was talking about global warming. The way that Sanford references a “tipping point”...

As the summer rolls on, the American economy is staying hot. That’s the main takeaway from the Bureau of Labor Statistics’ reports on Friday, which shows that the economy added 164,000 jobs in July. That lined up for the most part with expert predictions. The economy is showing signs of resiliency economy due to sound policies like deregulation and tax cuts. Nonetheless, it’s time to get real about the negative impacts that tariffs and out-of-control spending will have on long-term growth. In July, we saw that the historically low unemployment rate went unchanged, hovering at 3.7%, while the labor force...

The Federal Reserve on Wednesday lowered interest rates for the first time since the Great Recession in 2008 to help stave off the possibility of an economic downturn. Policymakers led by Fed Chairman Jerome Powell voted 8-2 in favor of a small cut in the federal funds rate, and recommitted to their promise to "act as appropriate" to sustain the country's longest economic expansion in history. Interest rates, which affect the cost of borrowing for credit cards and mortgages, are now set to hover between 2% and 2.25%. The rate cut follows months of pressure from President Donald Trump, who...

What the Market wanted to hear from Jay Powell and the Federal Reserve was that this was the beginning of a lengthy and aggressive rate-cutting cycle which would keep pace with China, The European Union and other countries around the world ... As usual, Powell let us down, but at least he is ending quantitative tightening, which shouldn’t have started in the first place - no inflation. We are winning anyway, but I am certainly not getting much help from the Federal Reserve!

Roman poet Virgil penned these words in his epic, The Aeneid, roughly a generation before the birth of Jesus of Nazareth. They can be loosely translated to, “the descent to hell is easy.” Those who’ve traversed this passage can attest to the veracity of this axiom. Though not apparent in the milieu of Virgil’s poem, for our purposes today, we’ll extend its application to the insidious progression of currency debasement. What short utterance more aptly characterizes the steady degradation, as currently practiced by today’s church of state? Yesterday [Thursday], for example, the House acted with untroubled ease to further America’s...

The U.S. government will pay American farmers hurt by the trade war with China between $15 and $150 per acre in an aid package totaling $16 billion, officials said on Thursday, with farmers in the South poised to see higher rates than in the Midwest.

The budget ‘deal’ being touted by President Donald Trump and House Speaker Nancy Pelosi will do nothing to solve the federal government’s fiscal issues. It’s more likely this ‘compromise’ is going to make problems even worse, especially once the debt markers are called in – whenever that happens.One of the (if not the) biggest problems in the ‘agreement’ is the fact spending can go up without any worry about hitting some sort of artificial barrier. 2. The Agreement modifies the discretionary spending caps imposed by the Budget Control Act (“BCA”) for fiscal years 2020 and 2021 pursuant to the...

When President Donald Trump begrudgingly signed a budget deal he called “ridiculous” in order to get increases for the military budget, he asserted: “I’m not going to do it again.” That was 16 months ago. Now, the Trump administration and House Democrats reportedly have reached a deal to suspend the debt limit temporarily and increase spending by more than $300 billion with only limited cuts. Around 5:45 p.m. in Washington, the president tweeted: "I am pleased to announce that a deal has been struck with Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, Speaker of the House Nancy...

The White House projects that the federal deficit will surpass $1 trillion this year, the only time in the nation's history the deficit has exceeded that level, excluding the four-year period following the Great Recession. "The 2019 deficit has been revised to a projected $1.0 trillion," the White House Office of Management and Budget (OMB) wrote in its midyear review. As a candidate, President Trump promised to wipe out not only the deficit but the entire federal debt, which has surpassed $22 trillion. Republicans cast aside projections that their 2017 tax reform law would add $1.9 trillion to the deficit...

The Congressional Budget Office has just released its mid-year update on the federal fiscal situation, and it portends a debt avalanche. But don't bother to tell Sens. Bernie Sanders and Elizabeth Warren that. They're busy advocating tens of trillions of dollars in new federal spending. The new report shows that budget deficits are expected to remain in the $1 trillion territory for years to come. It appears that 13-digit deficits are the new normal in Washington, as spending inexorably keeps rising by hundreds of billions of dollars a year. This spend-and-borrow forecast ranges from troublesome to panic-room sheer terror —...

Debt was a much bigger topic of conversation during the Obama administration. Republicans mostly arguing it was reaching a critical level and progressives mostly suggested we shouldn’t worry too much about it (We can always mint that $1 trillion coin). Today the CBO released new long-term projections of federal debt which suggest it will nearly double as a percentage of GDP by 2049: In our extended baseline projections, budget deficits drive federal debt held by the public to unprecedented levels. Debt rises from 78 percent of gross domestic product (GDP) in 2019, which is already high by historical standards,...

The Treasury Department reported a $208 billion deficit for the month of May — which is $61 billion higher than May 2018. To put that in perspective, the deficit for the entire year of 2007 was $161 billion. In the first eight months of the current fiscal year, red ink has already reached $738 billion. Even adjusting for inflation, the total annual federal deficit has exceeded that only six times in the nation’s history (five of them under President Obama). Not surprisingly, the Republican tax cuts are taking the blame for this year’s extraordinary deficits. But wait a minute. Overall...

This year, Sen. Rand Paul's (R–Ky.) effort to balance the federal budget didn't even get a floor vote in the Republican-controlled Senate. Paul's so-called "Pennies Plan" failed a procedural vote on Monday evening when only 22 senators voted in favor of a cloture motion that would have brought the bill to a final vote. A majority of Republicans and all Democrats voted against proceeding to a floor vote on the bill. It's another sign that fiscal responsibility is all but dead in Congress, even as the national debt heads toward record highs and the budget deficit approaches $1 trillion this...

If Congress doesn’t act, Americans’ taxes will automatically increase in the coming years. The 2017 tax cuts are temporary, and some of those taxes are scheduled to start increasing in three years’ time. Last year, American families of four saw their taxes cut by an average of $3,000. The typical taxpayers benefited from getting to keep about $1,400 more of their hard-earned money. One of the most important parts of the tax cuts, which support new business investments for workers and jobs, begins to expire after 2022. Three years after that, taxes increase on personal income. As deficits increase to...

I keep reading where the Chinese are flaying us in trade. Balance of trade deficits keep going up, and the Chicken Littles scream that the sky is falling. Seems to me balance-of-trade worries are misplaced. Supposedly, we got equal value for what we spent; it's just easier to quantify the dollars we put up than the goods they put up. Example: Who got more out of the deal when you bought your car? All you got was a car, but the dealer got, say, $40K. Is your balance of trade with the dealer out of whack? Not at all. He...

Each year, millions of Americans pay their taxes. We suffer through the nightmare of unfathomable IRS forms, spend tens of billions of dollars on tax experts so the IRS won’t audit us … and yet watch as other people slip through the cracks.Those cracks are pretty large. The IRS has concluded that approximately 16.3 percent of taxes simply don’t get paid. This was the case in 2001, 2006, and 2008-2010.In 2018, this meant that almost $643 billion in federal taxes simply went unpaid, based upon the $3.3 trillion pulled into federal coffers– what the IRS and Government Accountability Office...

President Trump and Democratic leaders have discovered the one policy that unites Washington: spending money we don’t have. Yet their bipartisan pledge to spend an added $2 trillion on infrastructure over the next decade faces serious obstacles if these leaders are to responsibly improve our infrastructure. First, Washington should spend only as much as it is willing to offset with other savings. Putting $2 trillion on the national credit card would boost deficits that are already on course to surpass $2 trillion a year within a decade, due mostly to entitlements. These deficits are projected to push ­annual interest costs...