Congress just passed an $80 billion spending increase
Posted on: November 17, 2017 at 16:08:05 CT
Knucklehead MU
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Congress just passed an $80 billion spending increase for defense.
Interest rates are headed higher, and the tax cuts will result in additional interest rate increases, higher interest and defense costs will offset any spending cuts that make it through congress.
You have to live in the real world. Deficits are going up.
Here is the big concern, what happens in the next economic downturn. We currently have a deficit of 660 billion, with low unemployment. That is about 3.5 percent of GDP. That is a fair representation of the current structural deficit (i.e. the portion of the deficit not attributed to economic cycle).
The tax cuts will increase the deficit by about 200 billion, taking the structural deficit to about 4.5 percent. We are headed to deficits of 7% of GDP in the next recession.
Edited by Knucklehead at 16:12:19 on 11/17/17