Federal Budget Deficit Explodes

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Federal Budget Deficit Explodes

March 5, 2019 at 3:05 pm EST By Taegan Goddard 53 Comments

https://politicalwire.com/2019/03/05/federal-budget-deficit-explodes/

"SNIP....

“The federal budget deficit ballooned rapidly in the first four months of the fiscal year amid falling tax revenue and higher spending, the Treasury Department said Tuesday, posing a new challenge for the White House and Congress and they prepare for a number of budget battles,” the Washington Post reports.

“The deficit grew 77% in the first four months of fiscal year 2019 compared with the same period one year before, Treasury said.”

.....SNIP"

[gratuitous]

1. That wasn't supposed to happen

President Trump and all the congressional Republicans swore up and down that emptying the Treasury into the pockets of the wealthy would result in higher tax receipts, reduced deficits, and lower national debt.

I wonder what could have happened? I wonder if anyone in the media will ask any Republicans about this, and how their promises came such a cropper. It's just too bad that nobody saw this coming or predicted that it wouldn't work. Surely anyone putting out such a contrarian viewpoint would have been catnip for the media, who just love them some minority opinions that buck the prevailing consensus.

[unblock]

2. the whole nonsense about tax cuts raising revenue is so f*cking stupid

for the most part, if tax rates are unchanged, the economy growing by an extra 2% means an extra 2% of income tax receipts. not exactly (because income isn't perfectly distributed) but for the most part, you're taxing income, so if income goes up 2%, total income tax receipts go up 2%.

so if you cut the tax rate by 2% and it makes the economy go up by about 2%, tax receipts pretty much break even.

but those aren't the kind of numbers in play when there are tax cuts. if the top rate is 40%, then a 2% cut in the *rate* means cutting it to 39.2%.

instead, tax rates are typically cut 10% or more.


who the hell thinks the economy is going to grow the extra 10% it would need to grow just to break even?

a 10% increase in gdp is insane, and no mere tax cut is going to have anything like that kind of an effect.

[democratisphere]

3. Buckle your helmet chin straps.

The redumbliCONS are on their way to crashing the economy, just like every other time they have occupied the oval office.

[yonder]

5. I'm buckling my chin strap for when they find their lost horn and start trumpeting

that deficits are out of control and something must be done. Like cutting SS, medicare, entitlements and demanding...wait for it....more tax cuts for the wealthy.

Funny how they forget to blow that horn when deficits are skyrocketing on their watch. It's been crickets the last couple of years.

Actually, we'll probably begin hearing that atonal cacophony soon enough now that we have a majority in the House.

[smirkymonkey]

4. Who could have possibly seen this coming?

[democratisphere]

6. .

[roamer65]

7. I fully expect government bond fund purchases to become mandatory in 401k's.

The government will have to use those monies to stay afloat.