Federal Budget: Government Adds $662B of Debt in Three Months

[rangerrebew]

 
August 13, 2024
・
Exploring Finance
Federal Budget: Government Adds $662B of Debt in Three Months
 
The Federal Government publishes the spending and revenue numbers on a monthly basis. The charts and tables below give an in-depth review of the Federal Budget, showing where the money is coming from, where it is going to, and the surplus or deficit.
This month saw a $244B deficit, which followed 2 months of large deficits. This brought the three-month total to a whopping $662B.



Figure: 1 Monthly Federal Budget

This was also the second largest July ever, only behind July 2021 shortly after Biden came into office to bring in new stimulus spending.

https://www.schiffgold.com/exploring-finance/federal-budget-government-adds-662b-of-debt-in-three-months

[Free Vulcan]

What I want to know is how are they floating it, by debt instruments are just printing the money?

The world financial system isn't equipped to handle this level of debt, how are interest rates not spiking thru the roof?

[Hoodat]

What I want to know is how are they floating it, by debt instruments are just printing the money?

The world financial system isn't equipped to handle this level of debt, how are interest rates not spiking thru the roof?

Interest rates are not spiking through the roof because this debt is entirely financed by the printing of new money.  Hence, there is no connection between interest rates set on existing money and the money that government raises.  It's been this way since 2009.  Which is why interest rates remained as low as they have for so long.

Under a static monetary supply, interest rates will always be higher than the rate of inflation.  Always.  The fact that they have not been proves that the money supply has not been static.  Businesses competing to borrow existing dollars no longer have to compete against a federal government that prints up its own money to finance its own shortfalls (which drives up inflation).  So interest rates can remain artificially low, while the value of the currency falls.

This is the number one issue America faces today.  It is destroying us.

[Free Vulcan]

Interest rates are not spiking through the roof because this debt is entirely financed by the printing of new money.  Hence, there is no connection between interest rates set on existing money and the money that government raises.  It's been this way since 2009.  Which is why interest rates remained as low as they have for so long.

Under a static monetary supply, interest rates will always be higher than the rate of inflation.  Always.  The fact that they have not been proves that the money supply has not been static.  Businesses competing to borrow existing dollars no longer have to compete against a federal government that prints up its own money to finance its own shortfalls (which drives up inflation).  So interest rates can remain artificially low, while the value of the currency falls.

This is the number one issue America faces today.  It is destroying us.

True, but there comes a tip point where no one wants the debt instruments, no one wants the currency, no one wants the paper. The Fed can't shoulder all of it.

And while yes we have had inflation, it should be IMO much higher with this amount of money constantly being injected into the system, or interest rates be much higher, or our currency much lower on foreign exchange, or something. Right now there seems to be no ripples at all.

[LMAO]

Interest rates are not spiking through the roof because this debt is entirely financed by the printing of new money.  Hence, there is no connection between interest rates set on existing money and the money that government raises.  It's been this way since 2009.  Which is why interest rates remained as low as they have for so long.

Under a static monetary supply, interest rates will always be higher than the rate of inflation.  Always.  The fact that they have not been proves that the money supply has not been static.  Businesses competing to borrow existing dollars no longer have to compete against a federal government that prints up its own money to finance its own shortfalls (which drives up inflation).  So interest rates can remain artificially low, while the value of the currency falls.

This is the number one issue America faces today.  It is destroying us.

Thankfully, the candidates are recognizing the problem of two trillion dollar deficits can cause to our economic well being and are putting forth serious proposals to deal with this issue plus making part of their campaigns the serious issue of expanding the money supply to fund the government and…..


Oh, forget it

[Hoodat]

This month saw a $244B deficit, which followed 2 months of large deficits. This brought the three-month total to a whopping $662B.

Just so everyone understands this, our GDP increased only $360 billion over that same time span.  In other words, 184% of our entire GDP growth over the quarter was eaten up by Big Government.  We as a nation cannot sustain this.

[Hoodat]

True, but there comes a tip point where no one wants the debt instruments, no one wants the currency, no one wants the paper. The Fed can't shoulder all of it.

The Fed shouldn't be shouldering any of it.  And they weren't prior to 2009.

And while yes we have had inflation, it should be IMO much higher with this amount of money constantly being injected into the system, or interest rates be much higher, or our currency much lower on foreign exchange, or something. Right now there seems to be no ripples at all.

There is plenty of ripple, evidenced mainly by a decreased standard of living.  It has been there for years, but it was subtle.  Like a frog tossed in a pot of cold water with the heat turned up.  But 2020 was the year where the pot boiled over.

Here are the numbers since 2014:

Government Spending as a Percentage of GDP

2014 - 34.9 %
2015 - 35.2 %
2016 - 35.6 %
2017 - 35.4 %
2018 - 34.8 %
2019 - 35.5 %
2020 - 47.0 %
2021 - 42.4 %

All the asinine Covid spending is what stoked up the inflation bonfire.  And until the Fed recaptures those dollars and destroys them, we are permanently stuck with higher prices and reduced standard of living.

When it comes to taxes, it is nearly impossible for government to bring in over 20% of GDP and still sustain positive growth.  Hence, it is suicidal for government to be spending more than 19% of GDP.  Our government has been committing suicide for 67 consecutive years.

Let that 47.0 % number sink in.  This is WWII-level spending.  And it was Republicans that let it happen.

[andy58-in-nh]

Interest rates are not spiking through the roof because this debt is entirely financed by the printing of new money.  Hence, there is no connection between interest rates set on existing money and the money that government raises.  It's been this way since 2009.  Which is why interest rates remained as low as they have for so long.

Under a static monetary supply, interest rates will always be higher than the rate of inflation.  Always.  The fact that they have not been proves that the money supply has not been static.  Businesses competing to borrow existing dollars no longer have to compete against a federal government that prints up its own money to finance its own shortfalls (which drives up inflation).  So interest rates can remain artificially low, while the value of the currency falls.

This is the number one issue America faces today.  It is destroying us.

The people want it - and deserve it.

Meaningful change will not happen absent catastrophe. It is the nature of human beings, especially when their culture has been degraded to the point of ignoring historical precedent in favor of wishful thinking.

We're going to get what we deserve, and we are going to get it good and hard.

Prepare.

[Free Vulcan]

There is plenty of ripple, evidenced mainly by a decreased standard of living.  It has been there for years, but it was subtle.  Like a frog tossed in a pot of cold water with the heat turned up.  But 2020 was the year where the pot boiled over.

Right now many prices have stabilized, yet spending and printing have kept at a breakneck pace.

When a dollar is printed, it has to go somewhere. Some has went to consumer prices, some to land speculation, and the markets, but those together don't explain where the money is going. We've nearly doubled the debt in 8 years - it should have broke the whole thing by now. The financial system just can't handle that load naturally.

It's like fentanyl - just what we impound would kill every American 10X over, yet the price never goes down and the supply never decreases. Where is it going?

On neither the debt or fentanyl have I seen a satisfactory answer yet.

[Hoodat]

Stocks, real estate, offshore, etc.  Look where the stock market is today compared then.  In 2009 when this 'quantitative easing' (i.e. the printing of the money) policy began, the DOW was below 8,000.  Today, it is five times that.  That is an annual increase of over 11%.

[Free Vulcan]

Stocks, real estate, offshore, etc.  Look where the stock market is today compared then.  In 2009 when this 'quantitative easing' (i.e. the printing of the money) policy began, the DOW was below 8,000.  Today, it is five times that.  That is an annual increase of over 11%.

It has taken a significant amount, as has land values and consumer prices. Doesn't explain everything but those are a big chunk of it.

[Kamaji]

The people want it - and deserve it.

Meaningful change will not happen absent catastrophe. It is the nature of human beings, especially when their culture has been degraded to the point of ignoring historical precedent in favor of wishful thinking.

We're going to get what we deserve, and we are going to get it good and hard.

Prepare.

Yup.  At this point, it may be more "productive", if one will, to push it forward aggressively to destruction.