by: the Common Constitutionalist
A new report appears to show bad news on the financial front as “the federal budget deficit this year will increase in relationship to the overall size of the economy for the first time since 2009 and continue to grow over the coming decade.” The Congressional Budget Office (CBO) estimates that the deficit will grow by an additional $105 billion, totaling $544 billion for 2016.
In August the same CBO estimated the 2016 deficit to be around $414 billion. Still a lot but nowhere near the revised estimate. So what happened between then and now? Simple – a republican sanctioned shopping spree to the tune of an additional $2 trillion in December. Remember that? Oh sure, republicans say they are also instituting spending cuts, but there aren’t.
Now, in the grand scheme of things, whether we add $400 or $500 billion of deficit spending, the difference won’t make a hill of beans worth of difference. Not with a debt load of around $20 trillion and unfunded mandates approaching a quarter of a quadrillion dollars. That’s a two, a five and 13 zeros. What’s a few hundred billion?
It is potentially so bad that the CBO says, “The likelihood of a fiscal crisis in the United States would increase” without appropriate action,” the CBO study said. “There would be a greater risk that investors would become unwilling to finance the government’s borrowing needs unless they were compensated with very high interest rates; if that happened, interest rates on federal debt would rise suddenly and sharply.”