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Budget News- Deficit explodes-congress fighting over peanuts

Discussion in 'Too Hot for Swamp Gas' started by l_boy, Sep 5, 2023.

  1. Sep 5, 2023 #1
    l_boy

    l_boy 5500

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  2. Sep 5, 2023 #2
    WC53

    WC53 GC Hall of Fame

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    Um, tax cuts ;)
     
  3. Sep 5, 2023 #3
    PITBOSS

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    both of those are incredible, each in opposite directions. Did fed spending increase that much?
     
    Last edited: Sep 5, 2023
  4. Sep 5, 2023 #4
    l_boy

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    I don’t know exactly how the term structure of the US debt plays out, but simplistically 30 trillion times 2 percent increase in an average rates would be 600 billion dollars.

    Higher Interest Rates and the National Debt.

    capital gains shot up in 2021 and FY2022. I think it has come down some in 2023

    https://www.cbo.gov/system/files/2023-02/58914_capital_gains.pdf
     
  5. Sep 5, 2023 #5
    thomadm

    thomadm VIP Member

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    Federal government current expenditures: Interest payments

    The US debt payment on interest alone has nearly doubled since 2020. It will continue to rise as interest hikes take hold in the next year or so.

    The interest payment alone per year would cover the DoD, NASA, and Dept of Energy for Fiscal year 2024. We have a real problem here folks.
     
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  6. Sep 5, 2023 #6
    l_boy

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    If rates don’t go back down, it becomes pretty challenging, as out debt keeps growing, due to interest, which causes more debt and more interest.
     
  7. Sep 5, 2023 #7
    gaterzfan

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    Actually, treasury rates are not that high from an historical perspective. For the last 3-4 years rates have been abnormally low and we (Americans) have been living a pipe dream thinking <1-2% was the new normal and would last for a long time. These low rates and the resulting low mortgage rates have been a significant cause for the inflation in home prices ..... but that's another discussion.

    Some of us were asking a few years ago what was going to be said when the treasury had to borrow would happen when the feds had to borrow $25+Billion at higher rates. Now we know .... the impact at borrowing $31 Billion at 4-5% significantly impacts the deficit, just as we knew.

    10 Year Treasury Rate - 54 Year Historical Chart | MacroTrends

    upload_2023-9-5_16-56-19.png
     
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  8. Sep 5, 2023 #8
    thomadm

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    I seriously doubt rates will drop anytime soon without a great recession or depression event.
     
  9. Sep 24, 2023 #9
    l_boy

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    https://www.washingtonpost.com/business/2023/09/24/government-shutdown-congress-budget/

    So these guys are fighting over a small slice of the budget and neither side seems interested in moving the needle in these growing deficits. No cuts in social security Medicare or defense. Debt service obviously can’t be cut. No willingness to look at taxes. Fighting over a fairly small discretionary spending sliver.




    Conservatives want to pare federal discretionary spending back to 2022 levels, which would mean cutting more than $100 billion from agency budgets each year.

    That’s a lot of money, but hitting the goal would require severe cuts to a small portion of the federal budget — mostly programs that provide services like education, medical research and aid for families in poverty. The government’s biggest annual expense, though, and the main projected drivers of U.S. debt, are the retirement programs Medicare and Social Security. The United States spends more than $6 trillion every year. McCarthy’s caucus is tying itself in knots over how to make cuts from domestic discretionary spending, which accounts for less than one-sixth of that total.



    Looking at it another way, the nonpartisan Congressional Budget Office projects that the annual federal deficit is expected to rise to nearly $3 trillion per year by next decade, up from roughly $2 trillion this year. If the conservatives in the House GOP get everything they’re seeking now, that number could drop to about $2.8 trillion per year.
     
  10. Sep 25, 2023 #10
    RealGatorFan

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    They are set to expire in 2025. What most don't know is the corporate tax cuts will stay on but the people's tax breaks will expire. If Democrats are in office in 2025, pretty much everyone will see a big hit in their take home pay. Instead of a 22% bracket, the average worker will see a return to 25%. Most earners will see a big increase in income taxes, even those earning $11,000. You keep slamming the tax cuts but have the democrats done any better? They increase taxes AND increase spending along with it. It wasn't an issue after Clinton, but looking at $33T today is a stark reality that a balanced budget will never happen in the USA ever again. $1T per year in interest payments, mandatory payments paid even before we pay Medicare and SS. If the only money we had left was between interest on debt, Medicare and SS, the interest comes first. Why do you think the Fed is afraid of high interest rates? It's why rates have been zero for the better part of this millennium. If we ever get back to 6 or 7% rates, interest on debt would easily surpass everything as the biggest bucket in the budget. At 6%, the interest on debt would be about $2T annually, surpassing Medicare and SS combined or almost 3 times the entire defense budget.
     
  11. Sep 25, 2023 #11
    WC53

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    If you are going to cut taxes, cut spending too. They didn’t because they couldn’t. So they went forward anyway. Crisis was created on top of the pre existing shatstorm.

    Ideological games. I could give a rats arse about either party. Math is math. Also disagree with loan forgiveness. Math.
     
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  12. Sep 25, 2023 #12
    l_boy

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    I mostly agree with you but if history is any guide democrats will work with Republicans to extend most of the tax cuts except for the very top, which is unfortunate because they should just let them expire. You are correct the corporate tax cuts were permanent.