Congressional Budget Office: Budget deficits about to explode


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The Congressional Budget Office (CBO) released a new budget analysis today that predicts the federal budget will see trillion dollar annual deficits for years to come, based on present government spending.

The Congressional Budget Office (CBO) released a grim update Wednesday to its economic outlook for the next decade, predicting average national deficits of $1.2 trillion every year through 2029, due in large part to recent budget and border security bills.

The CBO report noted that, as one of many repercussions from free-spending policies, federal debt held by the public is projected to reach heights not seen since the 1940s, almost equaling the nation’s Gross Domestic Product. “As a result of those deficits, federal debt held by the public is projected to grow steadily, from 79 percent of GDP in 2019 to 95 percent in 2029—its highest level since just after World War II,” the report says. The GDP itself is also expected to see a slowdown in growth in the coming years.

The CBO report underscores how deficits are rising once again, as Democrats and Republicans in Congress — and the Trump administration — show little interest in tackling the red ink. [emphasis mine]

Trump is not breaking any promises in doing nothing to restrain spending. He has never shown much interest in reducing the deficit, and in fact has often appeared eager to spread government cash around freely.

The Republicans in Congress however have repeatedly campaigned on a platform of fiscal responsibility. They have also repeatedly proven that platform to be an outright lie. Once elected they have routinely spent money as willingly as the Democrats, and the new budget bill recently agreed to by Congress and Trump underscored this, as they went along with a deal that removed all the restraints of sequestration that had helped limit budget growth for the past six years.

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7 comments

  • wayne

    meanwhile, in the private sector:

    “On April 29th, 2019, Fisher Sand & Gravel Co. was contacted by We Build the Wall to construct a half mile of fence in Sunland Park, New Mexico. The location was deemed “unbuildable” by government agencies due to the harsh construction conditions. In just over one month of being notified of this project, Fisher procured and fabricated the bollard fence panels and finished all construction within two weeks.”

    Fisher Industries Border Wall
    El Paso, TX
    June 25th, 2019
    https://youtu.be/jlzxkRkFSyU
    2:24

  • Michael

    “fiscal responsibility” = “the other guys pet ox MUST be gored”

  • Dick Eagleson

    The CBO is a creature of Congress, especially of the House. So this new report is simply battlespace preparation on the part of Democrats for the 2020 campaign. This is obvious when one notes that expenditures on border security are the only ones singled out for mention as a “cause” of the budget deficit. This is simply and purely Dem propaganda. Federal costs incurred as a result of illegal immigration dwarf those of border security in any given year and have for years.

    The prediction that GDP would grow more slowly in coming years is also Dem wishful thinking. Every prominent Dem has been predicting an imminent recession since Trump took office. There is no basis for assuming any such thing is imminent, so the Dems are simply asserting it will happen under cover of CBO reportage.

    This is also a requirement, mathematically, to support the equally baseless assumption that federal debt as a percentage of GDP will rise to near unity over the next decade. So long as the deficit, as a percentage of GDP, does not exceed the growth of GDP in a given year, the federal debt as percentage of GDP will stay where it is. This number has been holding steady at about 80% of GDP for several years now after having experienced a huge jump upward during the Obama administration. This is not a good situation, but it is at least a familiar one as it represents a return to what had long been a pre-Obama norm.

    Deficits will continue so long as nothing is done about entitlements, the real source of endless deficits. The Republicans have never proposed a credible plan for dealing with this central structural problem with government finances because I don’t think anyone in the Republican Party actually thinks that any such plan is even possible. As the Democrats have no real interest in either the deficit or making changes to the entitlements that are its root cause, Republicans could expect no help from that quarter even if they did have a plan. But, absent any such plan, Republicans have been content to let the issue lie.

    I’ve been working a bit on what I think is a credible way out of the entitlements vice we now find ourselves increasingly squeezed by, but the solution I see would require both an end to public employee unions and their separate pension plans along with a conversion of Social Security’s financial base from regressive taxation to equity investment. An attempt to implement such a plan would inevitably spark an essentially existential battle between the Republican and Democratic parties and, were the Republicans to be victorious, the Democratic Party would be effectively dead. If the Democrats won, the country would be dead.

    I see little sign that anyone on the Republican side is likely to sign on to such a crusade. Still, when I’ve had more time to refine my notion, I will run it up the flagpole, as the saying goes, and see if anyone salutes. I have living offspring and so, perforce, also have a mortal stake in seeing to it the country comes through its present troubles and comes out the other side in good shape for the long pull.

  • wayne

    The High Cost of Good Intentions: A history of Federal Entitlements
    Featuring John Cogan October 2017
    Uncommon Knowledge/Hoover
    https://youtu.be/rqthAe5-4Zg
    45:47

  • m d mill

    As the number of parasites and their apologists in the society grows , the ability of any successful political movement to run on the principle of personal and societal freedom and responsibility becomes impossible. That number is ever growing. In fact, the growth of that number is a primary goal of liberal and leftist strategists and activists.

  • I remember a time when congress came within one bite of a balanced budget amendment.

  • wodun

    Building off what Dick Eagleson said, the media relentlessly attacks Republicans when they propose ways to get the budget under control. Republicans, up until Trump, have not been able to find a way to combat a media that acts as Democrat party propagandists, even they even realize that is the case, many don’t. But even Trump hasn’t pushed this issue because he knows how damaging the media is.

    All of these media outlets complaining about deficits will be the first ones to turn on Trump and/or Republicans if they propose any ways to lower spending. We have already seen how space nerd publications do it but the same is true with every other area of interest. Cutting spending means cutting money from everything, and that creates an endless list of articles that would be written.

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