Government

Budget deficit on the rise again… increasing debt and interest payments 

Policies have an interesting lag time so what one administration does, easily ends up a successors problem with no accountability where it should be. That’s political life at every level. 

Now look at the drivers of the deficit (and debt) growth. As usual, the oldest generation is the largest single driver of federal spending. Such spending is already over 50% of total federal spending and it’s not discretionary. 

To get this under control, revenue will have to increase or spending decreased. The best way for everyone is to have a great economy that generates more revenue without raising tax rate while decreasing the need for social program spending. So, how are we going to deal with this? 

And, by the way, keep this in mind when you hear the call for expanded social programs like Social Security, Medicare and “free” college. It’s nice to have the stuff we want, it’s not as nice figuring out how. 

In fiscal year 2016, for the first time since 2009, the federal budget deficit increased in relation to the nation’s economic output. CBO projects that over the next decade, if current laws remained generally unchanged, budget deficits would eventually follow an upward trajectory—the result of strong growth in spending for retirement and health care programs targeted to older people and rising interest payments on the government’s debt, accompanied by only modest growth in revenue collections. Those accumulating deficits would drive debt held by the public from its already high level up to its highest percentage of gross domestic product (GDP) since shortly after World War II. Source: Congressional Budget Office 1-24-17

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3 replies »

  1. DON”T TELL CONGRESS. The government has the power to print money without interest.
    But, the bankers who control the FED and the money supply will not like it. Many of the founding fathers were against the Bank of The United States – now the FED.

    Like

  2. You lie! Just ask Nancy Pelosi, Hillary. Clinton, Harry Reid and Donald Trump. We can have it all and others will pay, the Mexicans, the “rich”, the French … the unborn , someone, anyone …

    It is only skinflint’s, Scrooges like Paul Ryan, who want to roll grandma in a wheel chair over the cliff so Republican (and Democrats too) can give our hard earned tax dollars to the rich, the corporations, etc. to buy votes or bestow gifts on favored Rent seekers (Solyndra anyone, corn farmers/ethanol producers anyone, …)

    They even co-opted folks like President Clinton who pursued entitlement changes 20+ years ago. Fooled him too I guess

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