Below you'll find a list of all posts that have been categorized as “Monthly Budget Review”
Our August commentary showing the projected growth in the federal government’s debt generated a perceptive question from one of our readers: how much would the new tariff regime improve the deficit picture? After all, the Congressional Budget Office estimates were compiled prior to the imposition of increased customs duties this spring and summer—what if we take the increased government revenues …
Let’s Not Kid Ourselves The Federal Reserve Bank best known for setting overnight interest rates, but its often overlooked statistical work includes compiling data on the nation’s financial conditions. One useful report is the quarterly Flow of Funds, which tallies the debt owed by American households, businesses, and governments. We have projected borrowings over the next ten years based on …
The passage of the budget bill has spawned a series of headlines projecting anywhere from 3.5 to 4.5 trillion dollars of increased deficit as a result over the next ten years. But as we pointed out last month, this comes on top of a projected baseline deficit of $22 trillion, meaning that the story really ought to be that the …
One of the most prominent obfuscations of the budget discussion involves how the dollar effect of a spending change or tax reform is reported. The numbers are almost invariably presented as “trimming $300 billion from the deficit” or “adding $ 800 billion to the red ink.” But these figures are almost always estimates for the next ten years, not just …
The Sweet Showers of AprilWhen April with his showers sweetThe drought of March hath pierced to the root– The Canterbury Tales, Geoffrey Chaucer The federal government took in $850 billion dollars in April, almost double its monthly average for the rest of the year. Washington’s coffers were swelled by an extra large slug of income tax revenue from 1040’s, along …
Blaming the Victim You read and hear it all the time – unfunded mandatory spending like Social Security is going to “bankrupt us” and the time has come to raise FICA taxes and/or cut benefits to fend off financial Armageddon. This narrative has become conventional wisdom in the halls of Congress and on the trading floors of Wall Street. But …
Some of you probably thought we were kidding when we suggested that the first approximation revenue raise from a 20% across-the-board tariff would only amount to two months worth of deficit. But by the beginning of December the federal government had already spent $600 billion more than it took in—pretty much what we estimated the proposed tariff would produce annually …
Frozen Last month we hinted at a paradox lurking in budgetary operations: that having more money to spend slows down the process and provides less. While this is by no means a universal law, it seems to be prevalent in areas like construction and capital equipment. To illustrate, let us consider the Coast Guard’s icebreaker program. The United States currently …
Last month’s commentary elicited a question from a reader — how do we square our distaste for deficits with our insistence that Social Security need not be cut? After all, media stories and commentary bemoaning the deficit almost always conflate this with the Social Security Trust Fund “running out of money” within the next decade unless something is done. The …
As you can see from the table above, we are on pace for an annual deficit of $2 trillion, give or take a couple of hundred billion. This mismatch between revenue and spending is pretty much as predicted, and nobody seems too bothered by it. Some ritualized denunciations of the growth in the national debt and deficits are appended to …
