by Peter Schiff, SchiffGold:
The US federal government is spending money like a drunken sailor.
And that’s probably unfair to drunken sailors.
In November alone, the US government reported a $139 billion deficit.
Pause for just a moment and think about what that actually means. Last month, the government spent $139 billion (billion – with a B) more than the revenue it took in. In other words, it put $139 billion on a credit card.
In one month.
Of course, this is nothing new. In November 2016, the feds reported a $137 billion deficit.
Economists polled by Reuters projected a $134 billion deficit last month. So, the government actually managed to spend $5 billion more than expected. But what’s a few billion dollars between friends, right?
Through the fiscal year to date, the US government has run up a $202 billion deficit, compared to $183 billion in the comparable period for fiscal 2017. You might be thinking, oh, well that’s not too bad for the whole year. But you have to remember the fiscal year for the US government starts in October. So that’s $202 billion in two months.
Receipts last month totaled $208 billion, up 4% from one year ago, while outlays came in at $347 billion, a 3% increase from November 2017.
No wonder the national debt has risen to more than $21 trillion.
All of this debt has significant ramifications.
The national debt is already over 105% of total GDP. That’s the highest level in history except for a two-year spike at the end of World War II. Studies have shown GDP growth decreases by an average of about 30% when government debt exceeds 90% of an economy. On top of that, the federal government has to service all of this debt in an environment of increasing interest rates. This could crush future US budgets under massive interest payments.
And it’s about to get worse.
The Republican tax cut plan will increase the debt by an estimated $1.5 trillion over the next decade. That’s what happens when you cut revenue and don’t do anything about spending. Peter Schiff called it “government on a credit card.” With the increasing debt dragging down growth, it seems highly unlikely the GOP tax plan will deliver on the economic promises advertised.
And as Peter explained during a recent RT Boom Bust interview, even with tax cuts, we still end up paying for the cost of big government.
Read More @ SchiffGold.com