The largest changes in outlays were as follows (the amounts reflect adjustments to exclude the effects of the timing shifts):
■ Social Security benefits rose by $5 billion (or 6 percent).
■ Medicare spending increased by $3 billion (or 6 percent).
■ Outlays for Medicaid rose by $3 billion (or 9 percent).
These are not the kinds of outlays that are easy to stop. They are politically charged.
The deficit is now on track to surpass $1 trillion in the 2020 fiscal year, which will end September 30, 2020.
CBO is calling the deficit path "unsustainable" and this doesn't take into consideration that we will eventually experience a spike in interest rates.
A perfect storm is developing.
The Federal Reserve, behind all its technical maneuvers, has only one real ability: The ability to print money. That's how they will help get the Treasury out of the jam in the short-term, print money to buy Treasury securities that will finance the debt.
But the price to be paid for this is an eventual major acceleration in price inflation and then what are the Fed and the Treasury going to do?
-RW
I know what they won't do...They won't learn from their recently fallen comrade Mr. Volker.
ReplyDeleteNo ... no they wont.
DeleteOh, they learned from their mistakes alright, they just want to ignore their having learned those lessons because they are CRAZY!!! Not even one of these total idiots can give out a truthful explanation of what inflation is or what money is. All that they can do is to parrot the lies that they have been convinced to be truth.
ReplyDelete