The US economy and financial markets had a great fiscal year 2019 and still the government went over $1 trillion deeper in the hole. From Simon Black at sovereignman.com:
Precisely one year ago today, the US federal government opened Fiscal Year 2019 with a total debt level of $21.6 trillion:
Specifically, the US federal debt on October 1st last year was $21,606,948,183,180.23
Today is the start of the government’s 2020 Fiscal Year. And the total debt is now $22,622,684,674,364.43
That means they accumulated more than $1 TRILLION in new debt over the course of the 2019 Fiscal Year.
Think about that for a moment:
FY2019 was, literally, the BEST year EVER measured by short-term US financial performance. The stock market reached an all-time high. Real estate prices reached an all-time high.
In fiscal 2018, the US borrowed $400 billion more than the officially reported deficit. From Tyler Durden at zerohedge.com:
Confirming recently reduced estimates of US debt borrowing needs – mostly as a result of new funds brought in via Trump’s trade tariffs – the Treasury Department today lowered its estimates of fourth-quarter borrowings to $425 billion from the $440 billion forecast it made in July, while assuming an end-of-December cash balance of $410 billion, up from $390 billion 4 months ago.
The revised Treasury numbers bring the total net borrowing needs for calendar 2018 at $1.338 trillion, while borrowings for fiscal year 2018 (which ended on Sept. 30) amounted to just under $1.2 trillion.
The Treasury also released its first estimate of borrowing needs for the January – March 2019 quarter, which it expects to hit $356 billion, well below the $488 billion borrowed in the same quarter of 2018, while assuming an end-of-March cash balance of $320 billion.
That kind of deficit number used to mean the US was in a deep recession. Now we have humongous deficits in the midst of what President Trump has called “the best economy ever.” One can only imagine what the deficit will be during the next recession. From Niv Elis at thehil.com:
The federal deficit hit $895 billion in the first 11 months of fiscal 2018, an increase of $222 billion, or 32 percent, over the same period the previous year, according to the Congressional Budget Office (CBO).
The nonpartisan CBO reported that the central drivers of the increasing deficit were the Republican tax law and the bipartisan agreement to increase spending. As a result, revenue only rose 1 percent, failing to keep up with a 7 percent surge in spending, it added.
Revenue from individual and payroll taxes was up some $105 billion, or 4 percent, while corporate taxes fell $71 billion, or 30 percent.
The August statistics were somewhat inflated, however, due to a timing shift for certain payments, putting the deficit measure through August slightly out of sync with the previous year, the CBO noted. Had it not been for the timing shift, the deficit would have increased $154 billion instead of $222 billion.
Earlier analysis from CBO projected that deficits would near $1 trillion in 2019 and surpass that amount the following year.