National Debt Exceeds $23 Trillion

Last week, the U.S. national debt crested $23 trillion. With all of the political drama surrounding the impeachment of President Trump, this milestone received scant media coverage. The lack of attention to the issue by the media doesn’t lessen the gravity of the national debt. The deficit for next year is expected to exceed $1 trillion, so the national debt will bypass $24 trillion by the end of next year.

Sadly, Congress, the President and most politicians seem to have little interest in eliminating the annual overspending and reducing the debt. It seems like the exact opposite is happening for the 2020 campaign season. Candidates are proposing more government spending, with few details of how to pay for their new plans. The result will be more deficit spending.

Are you satisfied with the way Congress, the President and our political leaders are addressing our $23 trillion debt?

Fiscal 2019 Deficit Through August

Below is a chart tracking the monthly deficit of the U.S. government for the current fiscal year, in comparison to last year (Fiscal 2018). The deficit through the first eleven months was in excess of $1 trillion. Since September is a month when tax payments are due, the September surplus should push the deficit for the year below $1 trillion… but not by much.

Since September 1 occurred on the weekend, certain payments that would normally be paid in September were paid in August. This shift in timing increased the August deficit by $24 billion. A similar timing shift happened in 2018. Even with this timing differential, the year-to-date deficit is $168 billion more than last year.

What do you think about federal spending that has exceeded revenues by more than $1 trillion over the past 11 months?

Fiscal 2019 Deficit Through July

Below is a chart comparing the current year U.S. budget deficit with the prior fiscal year. Through the end of July, the federal government has overspent by $867 billion.

The current year-to-date deficit is $182 billion more than the deficit through July 2018. It’s also more than the deficit for all of Fiscal 2018 (the fiscal year ends on September 30). Based on the current spending, the annual deficit for Fiscal 2019 will exceed $1 trillion.

The last time the deficit exceeded $1 trillion, the U.S. was spending to stave off another Great Depression. At present, the economy is not in recession. Instead, the stock market is reaching all-time record levels, unemployment is at records lows and the economy is booming. Despite these prosperous times, Congress and the President continue to overspend with little regard for the future, or how the U.S. national debt is going to be repaid.

Are you concerned with a $1 trillion annual deficit in the midst of economic prosperity?

Fiscal 2019 Deficit Through June

Below is a chart comparing the monthly deficit or surplus for Fiscal 2019 in comparison with Fiscal 2018. Through the first nine months of this fiscal year, the U.S. government overspent by $746 billion, which is $139 billion more than last fiscal year.

The deficit for July was only $9 billion. This primarily due to $50 billion of July expenditures which were paid in June, since July 1 fell on a Saturday.

Government receipts were up by 3 percent for the first nine months of Fiscal 2019. However, expenditures were up by 7 percent. With this 4 percent spread, it’s easy to see why the deficit has grown by another $139 billion this year.

How sustainable do you think it is for expenditures increase by more than double the rate of revenues?

Fiscal 2019 Deficit Through May

The chart below compares the U.S. government’s monthly deficit or surplus for Fiscal Year 2019 with Fiscal Year 2018. Through the end of May, which is seven months into the fiscal year, the U.S. government has overspent by $738 billion.

To make a fair comparison, the May deficit is $50 billion higher, because of June payments made in May. Since June 1 was on Saturday, certain expenditures were paid in May instead of June. If you subtract out this extra $50 billion the deficit was still $688 billion, which is still $155 billion more than the prior seven month period. The CBO still estimates the Fiscal 2019 deficit will be less than $1 trillion, but it wouldn’t take much disruption, either from an economic slowdown or unexpected expenditures, to push beyond the $1 trillion mark.

Excluding the $50 billion timing, the U.S. government is overspending in excess of $22 billion per month. How does that affect you?

Fiscal 2019 Deficit Through November

The chart below compares the U.S. deficit by month with the prior fiscal year. In the first two months of the year, the U.S. has overspent by $303 billion, which is $101 billion more than last year.

Since December 1, 2018 fell on a Saturday, certain payments that would have been made in December were accelerated into November. Subtracting the timing of those payments, the deficit would have been $229 billion. Considering there were 61 days in October and November, the U.S. government spent $3.75 billion more each day than it received. With a projected deficit of nearly $1 trillion this year, the overspending will decrease to an average of $2.75 billion per day.

How long do you think the U.S can continue overspending nearly $3 billion each day?

Fiscal 2018 Deficit through August

The chart below compares the monthly deficit for Fiscal 2018 with Fiscal 2017. The cumulative deficit for the first 11 months of the year is $895 billion.

The federal government recorded a whopping $210 billion deficit for August. Since September 1 occurred on Saturday, the government paid approximately $55 billion of expenditures in August which normally would have been paid in September. Excluding this timing difference, the U.S. still would have overspent by $155 billion.

The acceleration of the $55 billion payments into August and the September tax collections will likely result in a monthly surplus for September. However, the U.S. government will overspend in excess of $800 billion this year.

Are you concerned the federal government will record a deficit in excess of $800 billion this year?

Fiscal 2018 Deficit Through May

The chart below compares the monthly U.S. deficit for Fiscal 2018 with Fiscal 2017. Through the end of May, the current year deficit is $530 billion, which is nearly $100 billion more than last year. Given the overspending to date, the federal government will likely spend approximately $800 billion more than it collects this year.

One of President Trump's economic advisers recently claimed the deficit was declining. This simply is not true. The Fiscal 2018 deficit is projected to be $125-150 billion more than last year's deficit of $666 billion. Since the federal government has overspent by nearly $530 billion over the past 8 months,  there is no way the current deficit will be less than last year.

Do you think anyone believes the current deficit will be less than last year?

Fiscal 2018 Deficit through March

The chart below compares the monthly deficit of Fiscal 2018 with Fiscal 2017. Through the first six months of the fiscal year, the federal government has overspent by $598 billion, which is $73 billion more than the prior year. As a percentage, the deficit is nearly 14% greater than one year ago.

The rate of growth in federal revenues has slowed since the beginning of January. Since most of the tax law changes became effective on January 1, this is not a complete shock, especially since the CBO projected the federal government would collect $1 trillion less over the next decade. Add in the additional spending approved through the Fiscal 2018 Omnibus appropriations bill, and the deficit will continue to increase throughout the rest of the fiscal year.

What do you think of the current increase of the federal deficit?

President Trump's Fiscal 2019 Budget

President Trump released his Fiscal 2019 Budget plan this past week. It's rare for Congress to adopt a President's budget. However, it's the first step in the budgetary process, and it outlines the President's plans and priorities.

Below are some highlights of President Trump's plan.

• Total Fiscal 2019 spending is projected to be $4.4 trillion, with $716 billion allocated for defense and $18 billion to build a wall along the southern border.
• Additional $200 billion of spending for infrastructure, which was part of the President's $1.5 trillion infrastructure plan.
• U.S. Gross Domestic Product (GDP) is projected to grow by 3% annually.
• The Fiscal 2019 and 2020 deficits will be approximately $1 trillion each year before slowly decreasing.
• The plan doesn't project a balanced budget within the next 10 years, and the deficit at the end of the decade is expected to be $450 billion.
• The U.S. will overspend in excess of $7 trillion over the next decade, pushing the national debt to nearly $28 trillion.
• The President wants to reduce domestic spending by more than $3 trillion over the decade, despite the agreement by Congress last week to increase domestic spending by $300 billion.

If you recall, President Trump campaigned on balancing the budget and addressing the $20 trillion national debt. Even though his budget isn't likely to become law, it demonstrates the difficulty our leaders face in trying to reduce federal spending and balance the budget. They may have good intentions, but the harsh realities of the difficult choices required and the potential political backlash make it near impossible to achieve.

This is just the first step in the budgetary process, but if the President, who campaigned on fiscal restraint, doesn't propose a balanced budget, don't expect Congress to pass one on their own.

U.S. Budget Deficit through November

Below is a graph tracking the monthly federal deficit for Fiscal 2018, which runs from October 2017 through September 2018.

The federal government overspent by $198 billion in October and November. This compares to the $181 billion deficit through November 2017. Revenues and expenditures both grew at 6% over last year. Since annual expenditures exceed revenues by $600 billion, the cumulative deficit is greater than last year.

Congress has yet to pass the required appropriations for Fiscal 2018, and current spending is determined by temporary funding measures. The current shot-term Continuing Resolution ends January 19, 2018.

Do you think the spending measures approved by Congress will increase or decrease the budget deficit for this year?

The Fiscal 2017 Deficit through August

Below is a graph tracking the monthly deficit or surplus for the U.S. Government. The year-to-date deficit is $621 billion, and the Congressional Budget Office is projecting a $693 billion deficit for Fiscal 2017, which ends on September 30.The Fiscal 2017 deficit is expected to be $100 billion greater than the Fiscal 2016 deficit.

From the graph, there is a clear pattern of overspending by the federal government. So far, there are only two months during the year that recorded a surplus, which easily explains why the federal government will post a deficit of nearly $700 billion this year. Since many corporate and individual income tax payments are due today, it's possible that September will also record a surplus, which would bring the total surplus months to three. However, the occasional surplus isn't sufficient to cover the deficits that occur in most months.

What do you think about the federal government spending more than it receives for nine months of the year?

Debt and Deficit-The Purpose

Concerned about the $19 trillion debt the U.S. government has accumulated? 

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