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The U.S. government Friday said its deficit rose to $1.7 trillion, or 6.3% of GDP, in the year ended Sept. 30 -- up from $1.4 trillion, or 5.4% of GDP, a year earlier. Without an accounting change related to the administration’s aborted student-loan-cancellation program, the deficit would have been closer to $2 trillion, a doubling from the prior year.
In projections released earlier this month, the International Monetary Fund projects U.S. deficits for all governments will reach 7.4% of GDP in 2024 and 2025.
Of course, none of the above matters... until it does.
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Contrast the US with some of the countries in Europe. In Greece, the deficit is forecast to fall to 1.6% of GDP from 2.3% last year, while Portugal’s is expected to fall to 0.2% of GDP from 0.4%. Ireland is forecast to have a budget surplus for the second straight year. Italy and France, among others, continue to have deficits of roughly 5% of GDP.
About half of the current U.S. debt, ~ $16T, comes due in 2024 and it will be rolled over at interest rates around 5%. The balance of the debt is at 2.5%, making the cost to service the national debt next year about $1.2T. Debt service will become the single largest line item in the Federal budget and it will represent about 18% of the projected $6.5T in expenditures.
All this assumes the economy continues to grow and generate enough taxes and the treasury can sell bonds at 5%. Ma Yellen is skating on thin ice.
The National debt is increasing at a rate of about a trillion every couple of months, not sure how long this ride can last.
of course a major world war would take everyone's mind off the debt...
The National debt is increasing at a rate of about a trillion every couple of months, not sure how long this ride can last.
of course a major world war would take everyone's mind off the debt...
Well, our President did say this last week:
“We send Ukraine equipment sitting in our stockpiles. And when we use the money allocated by Congress, we use it to replenish our own stores, our own stockpiles with new equipment. Equipment that defends America and is made in America. Patriot missiles for air defense batteries, made in Arizona. Artillery shells manufactured in 12 states across the country, in Pennsylvania, Ohio, Texas. And so much more."
Of course the money "allocated by Congress" is 100% borrowed.
The demand for us treasuries will continue to be pushed down as they supply side will be a crashing wave upwards. It will lead to upward pressure on interest rates.
I think Congress knows more about this than they're letting on.
They voted for the trillions given away due to COVID, increased spending every year since, and the R side of the House was so incensed at the last spending bill they agreed to suspend the debt ceiling for what?, the next two years?
They have the most to lose and worry about it the least. What they know they're not telling us, but we're definitely not seeing the whole picture.
While the U.S. budget deficit is on track to be much bigger this year than last, some sources think we shouldn't panic about it...
The rise in the deficit this year isn’t because of a sudden surge in spending—it mostly reflects a fall in revenues from unusually high levels last year.
The nation’s fiscal imbalance remains a concern even though lawmakers agreed to a debt ceiling deal that is expected to reduce budget deficits by $1.5 trillion over the coming decade. https://www.cnn.com/2023/09/06/polit...cit/index.html
And of course, like with everything else posted on Internet - you can't get a clear view on the subject, because other sources post contradicting info:
I think Congress knows more about this than they're letting on.
They voted for the trillions given away due to COVID, increased spending every year since, and the R side of the House was so incensed at the last spending bill they agreed to suspend the debt ceiling for what?, the next two years?
They have the most to lose and worry about it the least. What they know they're not telling us, but we're definitely not seeing the whole picture.
The debt ceiling has been suspended in the past. Don't know why they even have it.
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