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Dems shoulda ran Hilary in 2008 and 2012, and Obama 2016.... those woulda been 3 easy winsComment -
Should of, could of, would of..... That's all Dems can do at this point is look in the rear view mirror and scratch their heads. Nothing working for them today and nothing happening for them 2020 with the way things are shaping up in America now..
Dems don't even have a lead runner and super star on the rise to challenge Trump.. That party is in a major funk and divided right now... Young socialist new breeds steeling the spot light from the old farts that are dug in.. Tug of war happening...Comment -
Pubs never had a leader either til trump won, he certainly wasnt the face of the party two years out. So its not like thats a bad thing, might actually be a plus. Actually it is a plus, any perceived leader would be run theough the gauntlet right now and certainly not come out unscathed
slow your roll, politics is just a big game of tug of war as you put it, or the pendulum swinging. Wont be long before we have a Dem pres and congress, and after that the tards will take back over
You’ve been alive long enlugh, you know how the game works.Comment -
Ive said before a moderate Dem populous could win every state. All 50. But there is nothing even close on the horizon. Candidates like Bernie, Warren, Booker are going to lose all of the south and high desert and all of the midwest and random fly over states. Probably close to Hillary's electoral count.Comment -
The way the economy is going now and if this Mueller witch hunt goes away or stalls out Trump will win in even a bigger landslide in 2020.. I'm still not convinced the DEMS are gonna win the House either in these mid terms coming up. Trump will be on the Campaign rally war path big time energizing the base in every State needed...
You know Trump doesn't wanna lose the house. He'll do everything in his power to prevent that from happenings.. He doesn't want more investigations started and or an impeachment try to go against him I'm sure...Comment -
Politics & Policy
The Rising Federal Deficit Is Fueling Growth
Tax cuts and spending increases are a big factor in this year’s economic boomlet. You got a problem with that?
Comment -
Justin Fox is a Bloomberg Opinion columnist covering business. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”
Read more opinionFollow @foxjust on Twitter
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The federal deficit has grown a lot over the past six months. This should come as no big surprise, given the tax cuts approved by Congress and signed by President Donald Trump in December and the spending deal reached in February, but it’s still striking to see the actual numbers from the Treasury Department, which last week released data on federal revenue and outlays in June. The U.S. government’s fiscal years begin in October, so we now have data for three quarters of fiscal 2018.
Taking OffThe Congressional Budget Office’s latest projection, which I’ve included in the chart, is that the full fiscal-year deficit will add up to $793 billion, or 3.9 percent of gross domestic product. That’s a little bit lower than the $805 billion it forecast in April, but the change is only a technical one, reflecting updated estimates of health insurance revenue and subsidies under the Affordable Care Act and spending under the appropriations bill signed into law in March. The CBO is still projecting that the deficit will keep rising to $973 billion (4.6 percent of projected GDP) in fiscal 2019 and just over $1 trillion (also 4.6 percent of GDP) in fiscal 2020.
Cumulative U.S. federal deficit by fiscal year
Sources: U.S. Department of the Treasury, Congressional Budget Office
*Dotted line represents CBO projection of fiscal 2018 deficit.
The CBO, in a long-term budget outlook published last month, also forecast that the deficit would reach 5.1 percent of GDP in 2028, 7.1 percent in 2038 and 9.5 percent in 2048, thanks mainly to burgeoning spending on Social Security, Medicare, Medicaid and other health-care programs, and interest on the national debt. The 9.5 percent deficit forecast for 2048 would still be lower than the 10.8 percent of GDP that the deficit hit during the Great Recession in fiscal 2009, but these CBO forecasts are meant to average out over expansions and recessions, and 9.5 percent is a whole lot higher than the average deficit since 2000 of 4.4 percent of GDP. This deficit trajectory is also probably unsustainable, likely to bring on inflation, fiscal crisis or political crisis — or all three — well before 2048 if not addressed.
But discussions of long-run budget prospects are so fraught with uncertainty and susceptible to distortion that I do wonder sometimes how useful they are. Meanwhile, we have actual numbers on revenue and spending for the first three quarters of the current fiscal year. So let’s look at those, and how they compare with the recent past.
Revenue Up, But Spending Up More
Federal government receipts and outlays through June, by fiscal year
Source: U.S. Department of the Treasury
Since fiscal 2015, when the deficit hit a post-recession low of 2.6 percent of GDP, revenue is up 3.8 percent and spending up 14 percent. 1 But while that makes it look as if spending is the main driver of the recent growth in the deficit, it’s really both.
That’s because revenue growth of 3.8 percent over three years is quite weak, given the circumstances. One factor is the Tax Cuts and Jobs Act of 2017, which took effect Jan. 1 of this year. Federal receipts are still up so far this fiscal year despite the tax cuts, but only by $33 billion, or 1.3 percent. Tax revenue virtually always goes up when the economy is growing, and all indications are that receipts would be rising faster if it weren’t for the new tax law. Receipts from corporate income taxes — the main focus of the tax act — are actually down $62 billion, or 28 percent, over the same period in the previous fiscal year, while this fiscal year’s increase in overall tax revenue substantially trails that of recent years during which the economy was growing at a similar speed. (For reference, real GDP grew 3.2 percent in fiscal 2014, 2.4 percent in fiscal 2015, 1.5 percent in fiscal 2016 and 2.3 percent in fiscal 2017, and Bloomberg Economics forecasts that it will grow 2.8 percent in fiscal 2018. 2 )
Another Look at Revenue and SpendingA few months of data obviously aren’t the last word on the revenue impact of the tax bill; those who claim to foresee big positive feedback effects from the tax cuts don’t see them arriving immediately. But for now the legislation is clearly tamping down tax revenue. Which is, after all, what tax cuts are supposed to do.
Percentage change through June over same period in previous fiscal year
Source: U.S. Department of the Treasury
As for the $115 billion, or 3.8 percent, spending increase so far this fiscal year, about half of it comes from the usual suspects of Social Security, Medicare and Medicaid, reports the CBO. The retirement of the baby boomers will be driving up Social Security and Medicare outlays for a while yet, while Medicare and Medicaid are both affected by health-care cost increases that after trailing overall inflation since 2010 are now outpacing it again. Another third of the spending increase comes from interest payments on the national debt, which are rising because the debt is getting bigger and interest rates higher. The rest is due to increased defense spending. Non-defense discretionary spending is actually down infinitesimally so far this fiscal year, although it would be up by a nontrivial amount if it weren’t for some accounting decisions at the Department of Education. 3
Put it all together, and the deficit is $84 billion bigger so far this fiscal year than in the first nine months of fiscal 2018, and the CBO expects it to be $128 billion bigger for the full fiscal year. That would amount to about 0.6 percent of projected GDP. Economic growth, meanwhile, is as already noted expected to accelerate by 0.5 percentage points of GDP in fiscal 2018.
I don’t want to be so simplistic as to suggest a one-to-one (or, more precisely, 1.2-to-one) correlation, but it does seem like this deficit increase is an underappreciated factor in the U.S. economy’s strength this year. It may be unsustainable. It may bring big problems down the road. It surely would have been even better to do this back in 2011 or 2012, when the economy was weaker and unemployment much higher. There also surely could have been ways to structure such a stimulus that would be more advantageous to workers and less generous to corporate shareholders. But for the moment, President Trump and Congress do seem to be following the Keynesian playbook to tolerably good effect.
- I'm not bothering with inflation adjustments in any of these revenue and spending calculations because (1) I'm only looking a few years into the past and (2) inflation has been quite low over this period.
- I arrived at my numbers here by calculating real GDP growth from the third quarter of the previous year through the third quarter of the year in question.
- That is, in fiscal 2017, the Department of Education revised the estimated net subsidy costs of loans and loan guarantees issued in prior years upward by $39 billion, and in fiscal 2018 it has revised them downward by $9 million.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
To contact the author of this story:
Justin Fox at justinfox@bloomberg.net
To contact the editor responsible for this story:
Brooke Sample at bsample1@bloomberg.net
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Comment - I'm not bothering with inflation adjustments in any of these revenue and spending calculations because (1) I'm only looking a few years into the past and (2) inflation has been quite low over this period.
-
Justin Fox is a Bloomberg Opinion columnist covering business. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”
Read more opinionFollow @foxjust on Twitter
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The federal deficit has grown a lot over the past six months. This should come as no big surprise, given the tax cuts approved by Congress and signed by President Donald Trump in December and the spending deal reached in February, but it’s still striking to see the actual numbers from the Treasury Department, which last week released data on federal revenue and outlays in June. The U.S. government’s fiscal years begin in October, so we now have data for three quarters of fiscal 2018.
Taking OffThe Congressional Budget Office’s latest projection, which I’ve included in the chart, is that the full fiscal-year deficit will add up to $793 billion, or 3.9 percent of gross domestic product. That’s a little bit lower than the $805 billion it forecast in April, but the change is only a technical one, reflecting updated estimates of health insurance revenue and subsidies under the Affordable Care Act and spending under the appropriations bill signed into law in March. The CBO is still projecting that the deficit will keep rising to $973 billion (4.6 percent of projected GDP) in fiscal 2019 and just over $1 trillion (also 4.6 percent of GDP) in fiscal 2020.
Cumulative U.S. federal deficit by fiscal year
Sources: U.S. Department of the Treasury, Congressional Budget Office
*Dotted line represents CBO projection of fiscal 2018 deficit.
The CBO, in a long-term budget outlook published last month, also forecast that the deficit would reach 5.1 percent of GDP in 2028, 7.1 percent in 2038 and 9.5 percent in 2048, thanks mainly to burgeoning spending on Social Security, Medicare, Medicaid and other health-care programs, and interest on the national debt. The 9.5 percent deficit forecast for 2048 would still be lower than the 10.8 percent of GDP that the deficit hit during the Great Recession in fiscal 2009, but these CBO forecasts are meant to average out over expansions and recessions, and 9.5 percent is a whole lot higher than the average deficit since 2000 of 4.4 percent of GDP. This deficit trajectory is also probably unsustainable, likely to bring on inflation, fiscal crisis or political crisis — or all three — well before 2048 if not addressed.
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trumptards are idiots. If they used the same formula on their household budget they would be in jail for theftComment -
Trump is ridding the planet of pedophiles, human traffickers and some more of the worst people on earth.
He's not a politician...he's a businessman who took over the most corrupt entity the world has ever seen.
There are people all over the world who are scared of him for what they have done
This will play out in a way that hopefully people can look at things in a different perspective and try to understand exactly how important it was for a non-corrupted individual to become President of our Corporation.
Trump is not the problem, those before him were...people just see what they want to seeComment -
He made some good points.
We do need to rid ourselves from some underground fraternity that thinks it's the protectors of Libtardville. We will.Comment -
Completely wrong
I'm evolving every day
Believing something yesterday has no bearing on what i believe today
You're stuck...not my problem, and you have no other perspective than your own manufactured one that CNN made for you
I was way ahead of the curve
You'll never catch up to what i know because your arguments are always dismissive of othersComment -
Btw vitt...you weren't even around when i was posting about stuff like that a few years ago
Either you did some real digging on me because people like me are a threat to your lies, or this is not your first Sbr account
Which one is it?
I don't expect an honest answer from a person like you...but humor meComment -
Bwaaaaahhhh. You make reference to “getting rid of pedophiles” about 30 times in the last month. That’s right out of the Alex Jones playbook. You’re a right wing whackjob that thinks the Clintons and Podesta are abusing kids in a pizza shop....you should be committed. I can spot you loons a mile away. You’re all programmed and brainwashed the same way.Comment -
On his way out, McCain did everything he could do to slime Trump. And of course, the Dems love it, as
McCain knew they would. In effect, McCain is leaving the stage as a RINO. He won't be missed by
Republicans. In his own state, he only has a 20% approval rating by Republicans, which is extraordinary
when you consider that he was dying and no doubt garnered some sympathy from that remaining 20%
.John violated an old fashion rule: you should leave the dance with the one that brung you.
McCain's last-minute Liberal heroics on Healthcare, while "gutsy," was short-sighted.
And it ignored the wishes of his constituents.
If McCain did in fact intend to get a last dig in at Trump, it was a failed, petty gesture.
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A true heroComment -
An exceptional post.
Those two let it get personal. Oddly enough they were almost perfectly aligned on all the issues. Both moderates.
I'll blame Trump for not finding a way to bring John into the party. Trump did a great job with guys like Cruz and Graham and Paul. But did not bury the hatchet with John.
RIP Maverick.. it was a good run.Comment -
Cruz and Graham had no choice....they had to fall in line because they have futures aspirations. Mccain was in position to tell trump to fuxck off. I mean, ted should be embarrassed....if someone disparages my wife and says my dad killed Kennedy.....he’s not getting my support. Ted is weak.Comment -
Interesting considering I’ve been right about every election ,except one , in last 10 years. Including all special elections. But his weakness has nothing to do with his election.
Cruz can still win in his fuxcked up district but that doesn’t mean he isn’t a weak human being. Trump called his wife ugly and his dad a murderer and he still sucks him off. Pathetic.Comment -
Dude, he ain't in a district, he's a US Senator.
Politics makes strange bed fellows. Hillary starts the birther and ends up SOS.
Trump ain't perfect. It was his job to make peace with John and he didn't. That cost the country dearly by keeping Obamacare. Although John did support castrating it in the tax bill.Comment
