US Budget Deficit Spikes To $984 Billion In 2019, Up 26%
IN THIS ISSUE:
1. Federal Budget Deficit Spikes to $984 Billion, Up 26%
2. Fed to Cut Rate Tomorrow, Then Pause Indefinitely
3. Another Government Shutdown Looming November 21
This is one of those weeks when there is seemingly a lot of news, but much of it – like the ongoing effort to impeach President Trump – is just simply “noise” that is not worthy of discussion herein. As a result, we’ll hopscotch through several topics of interest today that I think are worth talking about.
We’ll begin with the fact that the US federal budget deficit for fiscal year 2019 spiked to $984 billion, up a whopping 26% from last year, the Treasury Department reported last Friday. While this shouldn’t come as a surprise to my readers, it is nonetheless troubling.
So much for President Trump’s promise to reduce the deficits and balance the federal budget in eight years. We all knew that would not happen, but the worst part is, the Congressional Budget Office projects annual budget deficits of $1 trillion or more as far as the eye can see.
Next, we’ll take a look at the Federal Reserve which wraps up its latest policy meeting tomorrow and is widely expected to cut the Fed Funds rate by another 0.25%. This time, however, there is talk the Fed will signal that further rate cuts will be put on-hold indefinitely. I’ll discuss what that might mean for the markets and President Trump’s possible reaction.
From there, I’ll discuss the fact that another government shutdown is looming on November 21. While these funding crises usually come and go briefly without much chaos, there are some who believe President Trump might actually want an extended government shutdown just ahead. I’ll explain why as we go along.
On a personal note, I am continuing to recover from total hip replacement surgery. This week, I’m transitioning from a walker to a cane, and hopefully by next week, I’ll be walking without any assistance. My doctor and physical therapist are both very pleased with my progress. Debi has been an angel in taking care of me through my first-ever surgery/overnight hospital stay. Thanks for all your well wishes!
Federal Budget Deficit Spikes to $984 Billion, Up 26%
The Treasury Department announced last Friday that the federal government’s budget deficit soared to $984 billion in fiscal year 2019, which ended on September 30. The final tally for 2019 is $205 billion larger than in 2018, a 26% increase. As a percentage of GDP, the deficit was 4.6% – 0.8 percentage points higher than the previous year.
Deficits have nearly doubled under President Trump amidst solid economic growth and low unemployment – and despite Trump’s vow to eliminate the federal debt in eight years. The main problem – you guessed it – is that federal spending continues to rise significantly under Democrats and Republicans. The Treasury estimates that the deficit will exceed $1 trillion next year and will remain above that level for years to come.