Posted on 01/15/2026 3:26:23 AM PST by know.your.why
The explosion of the budget deficit was one of the most worrisome things that happened post-Covid. While inflation peaked in 2022, the deficit kept getting worse because of the “fiscal doom loop” caused by bloated spending and higher interest rates.
At this time last year things were still looking extremely grim. The deficit was stuck around $2.1 trillion on a rolling 12-month basis, or 7.3% of GDP--the largest non-emergency deficit we’ve ever had. And the10-year Treasury yield was stuck above 4.7%, worsening the situation daily. Now, though, we are experiencing a dramatic improvement.
The latest numbers which we got yesterday afternoon illustrate the sharp change we’ve seen. For the first three months of the fiscal year (October through December), the deficit is down $109 billion, or 15% from a year earlier. Tariff revenues, known as “customs receipts,” are a big part of that, hitting $90 billion from $20 billion the prior year.
The market had been anticipating some improvement, as we wrote last summer. The 10-year Treasury yield even dipped below 4% briefly in the fall. The question now is how long this improvement can last. Tariff revenues already appear to be plateauing at around $30 billion a month. And the “One Big Beautiful Bill” is expected to increase the deficit in the months ahead.
(Excerpt) Read more at cnbc.com ...
Dear FRiends,
We need your continuing support to keep FR funded. Your donations are our sole source of funding. No sugar daddies, no advertisers, no paid memberships, no commercial sales, no gimmicks, no tax subsidies. No spam, no pop-ups, no ad trackers.
If you enjoy using FR and agree it's a worthwhile endeavor, please consider making a contribution today:
Click here: to donate by Credit Card
Or here: to donate by PayPal
Or by mail to: Free Republic, LLC - PO Box 9771 - Fresno, CA 93794
Thank you very much and God bless you,
Jim
$109 Billion? Pffft! Loose pocket change.
My share is only about $250k.
They should start selling off the silverware.
Any deficit should never happen and ringing praise for reducing it is still insanity.
Imagine every year you continue to out spend your income, your debt is significantly more than what you make but this year you cut down on how much you out spend it by.
Most Americans are clueless on deficit vs debt and when they hear were reducing the deficit they think its debt... asinine.
“At this time last year things were still looking extremely grim.”
And they still are, that summary is like the classic phrase “putting lipstick on a pig.”
We are still accumulating debt about some $6 billion a day, should the GOPe lose the house this fall this is why, a low turnout as usual.
I measure the economic health of the nation in my humble way. 2024, gasoline was well over $3; now it’s $2.50.
2024, a can of Colombian coffee, about 22 oz, was $17; now it’s $11.
2024, home heating oil was over $4/gal, now under $3/gal.
A small uptick in the latest figures isn’t nothing, but the trend is not our friend.
https://fred.stlouisfed.org/series/FYFSD/
Even with this slightly less bad deficit, we are still adding to debt faster than GDP is growing (the deficit is about 6 percent of GDP versus a real GDP growth rate of about 2 percent). The difference, about 4 percent, will be the inflation rate.
Wonder if eliminating the deficit even pays the interest on the Debt? We got a long ways to go.
Well said. Maybe throw in mortgage interest and unemployment rates.
Same trend for milk and eggs BUT beef, pork, chicken, seafood prices are way to high here in the deep south. I would have thought that lower oil prices would have had a lowering effect on that by now.
“”””If we lose the house they will most likely impeach successfully this time”.”””
Thy already successfully impeached him twice. But thy will never be able to convict him.
Reduction could easily be doubled or quadrupled if fraud was tackled more aggressively
Great news!
Tariffs are beautiful. Patriots love them. Greedy globalist free traitors, not so much.
So the deficit is only $1.9T. Per year.
DOGE, RFK, DR OZ should start looking at the WFA WASTE FRAUD ABUSE in HHS.
Start with DELOITTE IES Integrated Eligibility System in 25 states, mostly the big states, not MN.
HHS is a big part of the budget, a big part of the WFA.
Washington state is frantically trying to halt fraud investigations.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.