Donald Trump promised to “drain the swamp,” but as Peter Schiff put it, “The swamp is now bigger and more expensive than ever!”
Republicans tout themselves as the party of fiscal responsibility, but the Trump administration has managed to outspend every one of his Democratic Party predecessors – and all of the previous Republicans too.
The US government spent a record $433.3 billion last month, running up a monthly deficit of $214 billion, according to data released by the US Treasury Department.
That’s $433 BILLION spent in a single month.
Federal government spending came in 30 percent higher than August 2017 and ranked as the highest outlay on record.
The deficit (spending over revenue) for the fiscal year (beginning in October) hit $898 billion. That compares to a $674 billion deficit in the same period of fiscal 2017, a 39.5 percent year-on-year increase.
The Congressional Budget Office now projects the deficit will eclipse $1 trillion next year – a year earlier than originally anticipated.
The federal debt (the aggregate of all past deficits) recently shot passed $21.3 trillion.
The government spent $32 billion just paying interest on its current debt last month. It plunked down $108 billion for Social Security, $65 billion bombing foreign countries…I mean for defense, $83 billion on Medicare, and $146 billion on all other government agencies and programs.
Not only is Uncle Sam spending more, he’s taking in less money thanks to the tax cuts. The Treasury collected $219.1 billion in revenue last month. That’s about $7 billion less than August 2017.
This isn’t to knock tax cuts. But without any accompanying cuts in spending, they just exacerbate the debt problem. Somebody still has to pay for government, tax cuts or no. That means you will either pay for it in higher taxes later (or your children will) or you will pay for it through inflation.
America needs government relief, not just tax relief.
Republican pundits will tell you not to worry. The tax cuts will spur economic growth. That will take care of the debt problem. The U.S. will grow itself out of trouble. But this traditional GOP talking point falls flat because debt hinders economic growth.
Several studies have estimated that economic growth slows by about 30 percent when the debt to GDP ratio rises above 90 percent. Most analysts say the U.S. economy has already hit the 105 percent range. In other words, you ain’t getting all this promised growth, Mr. Republican.
Now, many economists do believe the GOP tax cuts gave a temporary boost to the economy. But the boost will likely prove short-lived unless Uncle Sam gets his spending problem under control. And I don’t see any sign that the Republicans are even remotely committed to doing what it takes to make that happen.
Some people will read this and think, ‘Ho-hum who cares.’ After all, people have been talking about runaway spending, budget deficits and the federal debt for years. Nothing horrible has happened. But remember, we’ve also been in an artificially low interest rate environment for years. The federal government continues to pile up debt and interest rates are climbing. The interest payment on the debt hit an all-time high of $538 billion in Q2 2018. This is unsustainable.
Politicians in Washington D.C. have created a vicious cycle of skyrocketing debt and borrowing that is only likely to accelerate, and seem completely unwilling to do anything about it. And Trump and the current batch of Republicans in Congress are no different than any of the rest of them.
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