US Launching Crisis Level Spending

In all the rhetoric over the proposed Trump budget, the Congressional spending bill, and so forth, it is easy to lose track of both the forest and the trees.

So here, courtesy of of Oxford Economics, is just one chart that shows what is really taking place: starting next fiscal year, the US is unleashing nothing short of "crisis level" spending, with the US deficit in 2019 set to top $1 trillion for the first time since 2012, and approaching the record deficit hit in 2009, when the US was hit by the worst economic crisis since the Great Depression.

But wait, there's more: it will only get worse from there.

As Oxford Economics reports, after deficit rise sharply in 2019, topping $1 trillion, it gets even worse: "The tax cuts passed late last year, combined with the spending bill Congress passed last week will push deficits sharply higher."

Furthermore, Trump's own budget anticipates that US debt will hit $30 trillion by 2028: an increase of $10 trillion...

... as a result of $1+ trillion debt (and thus deficit) increases for at least the next 5 years.

To which one wonders: have the words "fiscal conservative" lost all meaning if the US is launching what is clearly crisis level deficits and crisis level spending at a time when the US economy is - allegedly -growing at a healthy pace, and what will happen if said economy were to actually enter a recession in the coming 24 months, which as a reminder, KKR sees as a 100% certainty.


DownWithYogaPants Mon, 02/12/2018 - 16:20 Permalink

You can not balance the budget when your system is designed to run on debt based money.  If you pay off all debts you have negative money in circulation.  For more on this see Bill Still's classic "The Money Masters".

Sudden Debt BennyBoy Mon, 02/12/2018 - 18:41 Permalink


and the last time they increased the debt with 10 trillion, 

the cost of living increased with 25%

now, when salaries stay flat, how many people will be able to survive another 25% plus increase in the cost of living?

It just means that  the next crisis is delayed once more 

but the day of reckoning will just be that more destructive.


America... is done with.

Europe... is toast.


We can't imagine anymore how the destruction will look like but over the comming years, people really really need a gold and silver nest egg because when the inflation bomb explodes... it's going to be massive.



There's yet again a shitload of money to be made from this spending binge!!!






In reply to by BennyBoy

Sonny Brakes aliens is here Mon, 02/12/2018 - 17:29 Permalink

Let me add that, those freebies are purchased with tax dollars upon which many businesses rely. What do you think Mr. Retail does when his customer's pocketbook contracts and they can't purchase as much today as they did yesterday? My guess is that he distributes his profit margins across fewer products while raising his prices on the same products until such time that his supply chain can adjust. Those adjustments are going to result in products of lower quality and quantity.

Of course, the people receiving the freebies would adjust their behaviour, but then who would vote for the Democrats?

In reply to by aliens is here

bluez Jim in MN Mon, 02/12/2018 - 16:32 Permalink

That's not where the real money's going. It's mostly going for world domination.

Also it begins to look like a lot goes to the Musks, Bezoses, etc.

This really looks like a Thelma & Louise ending. It scares me. I really wish I knew what Trump and Congress are thinking. But that would probably scare me to death.

In reply to by Jim in MN

Jim in MN bluez Mon, 02/12/2018 - 16:45 Permalink

I was kidding.  I'd prefer a rollback to Reagan-era levels, in NOMINAL terms.


Then we wait about five years for the dust to settle and have a grown-up conversation.


I like President Trump, but honestly we have a diseased society in which only sociopaths and weasels are allowed into power with the rarest of exceptions.  As I have written here many times, keep your precious assets the Hell away from NY and DC, and be kind to your kids--they will pay the price.

In reply to by bluez

Jim in MN Uchtdorf Mon, 02/12/2018 - 16:49 Permalink

I keep a 'rolling essay' updated called The Next Fifteen Years in which I evaluate the likelihood of getting my kids out of high school before she blows.  Well it's been a long time already so the title's outdated but I like the time frame for thinking.

It's an interesting exercise in probabilities.  I had thought the end of Hillary's first term could be the big one, but we bought ourselves some time with Trump.   2025 is a long time from now.  Who knows, maybe sanity will break out.  Or frugality.

In reply to by Uchtdorf

Jim in MN geno-econ Mon, 02/12/2018 - 16:52 Permalink

Facts can be stubborn things.  We're close to global peace right now.  Kind of a 'pax Sinoica' (Chinese peace) with Russian muscle and American benign neglect.

It's possible that we just tell the military they can have everything they want, and just let the sand collapse under them. 

There's hardly any hot wars now, and entire continents at peace.

NO ONE wants to talk about or hear this.  Trust me.  But read the news from Africa, Latin America, etc. and you'll see that it's true.

Shopkeepers and schoolteachers, free to go about their business.

Billions at peace.

Now, tonight.

In reply to by geno-econ

DisorderlyConduct Mustafa Kemal Mon, 02/12/2018 - 20:25 Permalink

Beginning with everyone on the dole. Take 10% off of every government line item. Then go after the inefficient systems and pointless programs.

Make welfare a not for profit enterprise. Donate and get a tax credit. But distribute thru churches and other nonprofits.

Close military bases and stop offensive ops. Move em home and build bridges and rebuild dams.

Basically stop being stupid with money...

In reply to by Mustafa Kemal

Dindu Nuffins DownWithYogaPants Mon, 02/12/2018 - 16:25 Permalink

How do you pay off $20 trillion in less than a century, when the largest surplus in history you've ever run is $200 billion, and that for only a single year? 

Pretending to be fiscally responsible at this point is squirting a water pistol at an inferno. Might as well spend freely till it collapses.

In reply to by DownWithYogaPants

Beam Me Up Scotty ejmoosa Mon, 02/12/2018 - 16:41 Permalink

As long as the Fed wants to keep rates below 3% it will happen.  Do you know what the meaning of the word INFINITE is?  As in the Fed has the ability to print INFINITE dollars??  That means they can buy bonds from themselves to set the rate.  Just as they could make the DOW 1,000,000 tomorrow as well.  As long as no one can audit the Fed, they can announce whatever they want for their "balance sheet".  You really think they are telling the truth??

In reply to by ejmoosa