We’ve hit the inflection point on the exponential debt graph. That means that things got a lot worse in a hurry. From Ryan McMaken at mises.org:
We’re about six weeks into fiscal year 2024, but if this year looks anything like last year, we can assume the federal government will continue to pile up debt at astonishing rates.
According to the September Monthly Treasury report, the US government accumulated an additional 1.7 trillion dollars in debt for the 2023 fiscal year, which ended October 31. That’ up by $319 billion, or 23 percent, from the 2022 fiscal year. As recently as June, budget-watchers had estimated the year-end deficit would be $1.5 trillion, but deficits quickly added on an unexpected $200 billion by years’ end:
The pace of increase, however, may have been even higher than 23 percent. As CNN noted, the $1.7 trillion number may reflect some creative accounting. As CNN reports, the Treasury Department reported the cancellation of Biden’s student loan forgiveness program as a windfall for federal revenues, and thus reduced 2023’s deficit by about $300 billion, bringing it down to $1.7 trillion. In other words, if we ignore the never-implemented student loan forgiveness program, the deficit actually doubled from FY 2022 to 2023. As CNN puts it: “The US Treasury Department listed the fiscal year 2022 deficit as $1.4 trillion because it took into account the cost of the president’s proposal. Without it, the deficit would have been closer to $1 trillion. … The agency then logged the overturning of the cancellation plan as a savings for fiscal year 2023, which reduced the size of the deficit to $1.7 trillion.”
So, the year-over-year increase in the deficit may have actually gone from about $1 trillion to $2 trillion—or an increase of 100 percent instead of 23 percent.
The Fed can’t lower rates when it wants? How did they get to zero?
The Fed can’t lower rates when it wants? How did they get to zero?