USA – Just in time for Halloween, Goldman Sachs announced that expected tax cuts along with increased spending for hurricane victims and a higher debt ceiling could push the U.S. budget deficit even higher than expected.
According to the new estimates, the deficit will hit $750 billion in 2018, $900 billion in 2019 and $1.025 trillion in 2020.
“It’s apparent that the Republican Party has softened its position on fiscal restraint, pivoting sharply in a way that could add trillions of dollars in federal debt over the next decade,” says monetary historian Andrew Gause, author of The Secret World of Money and Uncle Sam Cooks the Books.
Cutting spending to balance the budget was almost religion to the Republican Party for much of the past eight years.
But all year long, despite their control of the White House and Congress, Republicans have taken no steps to balance the budget or to trim entitlement programs such as Medicare and Medicaid, or to arrest the growth of the country’s $20 trillion debt.
“Last month Congress voted to suspend the debt ceiling, (which had been set at 19.8 trillion).
“When the debt ceiling is reinstated in December, it will be reset at whatever level the debt has risen to.”
Gause says that with the debt ceiling suspended, both sides of Congress have an opportunity to favorably impress voters with their compassion and generosity by providing entitlements and assistance packages that the government, strictly speaking, cannot afford to provide.
Gause says after December 8th there exists the possibility that the Statutory Debt Limit could be altogether abolished, handing politicians an open checkbook with which to buy voter support while they charge the costs to every citizen with a bank account through the invisible tax known as inflation.
“Donald Trump told voters during in the 2016 primaries that he was ‘The King of Debt’ and knew exactly how to use debt to get the economy roaring,” says Gause.
“The Republicans now seem to be following President Trump’s lead.”