March of 2021 was during Covid pandemic. So without a historic crisis, that was out of anyone’s control. This is completely done by the regimes own making without outside forces.
I imagine the GOP would be beating the drum for it too. I do want to know what they are spending this money on as it mostly seems like war, grifting and punishing people while claiming cuts save money.
CNN anchor: "let's look at this video of the democratic president waving the american flag. does this look like a callback to the civil war, referred to by some as the war of northern aggression, and if so is this a call to violence against the southern red states?"
guest: "i think that's the only reasonable conclusion. by the way this constitutes terrorism, and there's no conscionable response other than impeachment at this point."
August 1st fell on a weekend. When the first of the month is a weekend, the government sends out benefit checks early to make sure they arrive on time.
Basically they prepaid a part of next month's expenses last month, good for $99 billion. The rest is an increasingly ageing population and inflation.
"Starting July 1, 2026, the temporary Medicare GLP-1 Bridge program provides limited coverage for certain GLP-1 weight-loss drugs for some people with Part D."
> while debt financing continued to be a significant contributor.
This is the part that's a real big thing - because debt crises became real scary when the debt starts impacting the ability to pay the debt, which causes the debt to increase, which . . . viscous cycle.
It also means that the government as a whole is going to be very constrained in dealing with inflation. Hard to raise rates when doing so is going to massively increase the deficit - and thus the amount you have to print to cover interests. That's actually what caused the German hyperinflation.
The crazy part is the deficit is lower than it should be due to the income we're getting from draining the SPR. Once we hit the operational bottom it's going to push up the deficit even more while oil loses one of its price suppressors.
It almost feels like they are being balls to the wall fiscally irresponsible on purpose just so the democrats will have very little room to spend when they get back in power since the fiscal situation will be at a breaking point. Truly sadistic.
Yep, and we Americans let a flawed voting system continue, and 77 million Americans voted for him. Why? Because a black man was voted into the White House, and the boomer racism came online like a fucking spy asset hearing it's trigger. We let the government fall into a ditch of obstructionism, and we allowed our representatives to deliver less and less every year, while big tech and now AI takes whatever the fuck they want.
Correct, there was a lot of stimulus to keep the economy from bottoming out, which was the biggest fear at the time. Still amazing we avoided it, even if the stimulus added to inflation a year later.
“lol maga maga you libcucks thought we cared about the debt, we just whanted to axe your dum woke policies, and all the stuff that helped black and brown people, lol lol maga maga maga lol lol”
This administration is gonna leave us with nothing once they are gone. Just watch. There will eventually be no more money for programs to help Americans.
It almost feels like they are being balls to the wall fiscally irresponsible on purpose just so the democrats will have very little room to spend when they get back in power since the fiscal situation will be at a breaking point. Truly sadistic.
Ok sure, but Jared Kushner's brother was able to buy The Lakers with stolen money so it's all working exactly as it should this is probably good for the country and we're going to have to just learn that what used to seen really stupid and almost like an intentional destruction of our country from the inside is actually some kind of genius.
Just loving it ! Standard macroeconomics says deficit spending is ok to lift an economy out of recession danger . But taking on debt in a hit and booming economy is a stark inflationary idiocy .
But the education level in the U.S. is so Joe that nobody there seems to know that . Worse , they have been VOTING for this .
Just under $1.8 trillion YTD, but the July shortfall totaled $432.3 billion.
That's more than $5 trillion run rate, the AI bulls must be terrified (because OpenAI etc. love extrapolating run rates from cherry-picked months). In all seriousness it's no wonder the fed didn't hike interest rates.
People are panicking over the deficit while ignoring basic accounting.
**Government deficit = nongovernment surplus.**
The accounting identity is:
**(S - I) + (M - X) = (G - T)**
If the government spends $100 and taxes $90, it runs a $10 deficit. The nongovernment sector receives a net $10 financial surplus. Some goes to Americans, some to foreigners.
Treasury debt is also someone else's asset. A $100,000 Treasury bond is a **$100,000 financial asset** to its owner and a government liability.
That does NOT mean deficits never matter. They matter when spending pushes demand beyond productive capacity and creates inflation, or when resources are wasted.
The questions that matter are:
* What did we buy?
* Who received the income?
* Are real resources available?
* What happened to output, jobs, and inflation?
A scary deficit number by itself tells you almost nothing.
You have to look at actual resources, goods and services to understand what deficit really means - not at money.
I.e. if government wants more datacenters today, when the sector is at full utilization of capacity - it is extremely bad for the economy, but if government wants something that is well below 80% of utilization it is actually good for the economy.
$3.18 trillion of US government spending (77.9% of spending that is used on targeted physical resources) flows into highly utilized or constrained sectors, while just $900 billion (22.1%) targets underutilized or flexible sectors.
That's the bad part - U.S. government deficit is terribly structured, taking resources that are already in high demand.
And this structural imbalance have been worsening over the last 50 years: it was 51% to 49% in 1976, 61% to 39% in 1996, 69% to 31% in 2006 and 73% to 27% in 2016.
That’s much closer to the actual issue.
The constraint on federal spending is not dollars. It’s the availability of real resources for sale in dollars.
If government increases spending where labor, materials, energy, productive capacity, etc. are already fully employed, then yes, the additional demand can raise prices or displace private use. If those resources are idle, the same spending can increase output and employment instead.
But I’d be careful with the claim that 77.9% of federal spending is going into “highly utilized sectors.”
First, most federal spending is not the federal government directly buying physical resources. Social Security, Medicare payments, interest payments, grants and other transfers add income to the nongovernment sector. Their inflationary effect depends on what recipients subsequently spend and what they buy.
Second, an 80% capacity-utilization number is not a meaningful economy-wide inflation threshold. Capacity constraints are specific. You can have spare aggregate capacity while simultaneously having shortages of electricians, transformers, nurses, semiconductors or defense production.
So the relevant question isn’t:
“How big is the deficit?”
And it isn’t even simply:
“What percentage of government spending goes to sectors above 80% utilization?”
It’s: What specific resources is the spending causing the government or private sector to bid for, are those resources already fully employed, and can supply respond?
That is where inflation risk comes from.
The accounting still stands: Government deficit = nongovernment financial surplus.
That tells you the financial result.
Real-resource analysis tells you whether the spending associated with that deficit is inflationary, productive, wasteful, or some combination of the three.
Those are two different questions, and neither invalidates the other.
dsj79 | 23 hours ago
March of 2021 was during Covid pandemic. So without a historic crisis, that was out of anyone’s control. This is completely done by the regimes own making without outside forces.
AngryTomJoad | 23 hours ago
i cant imagine if this was a D president in office - you would be hearing this news story 24 x 7 at the top of the billionaire press lungs
Longjumping-Ad514 | 22 hours ago
Of course you would.
bd2999 | 22 hours ago
I imagine the GOP would be beating the drum for it too. I do want to know what they are spending this money on as it mostly seems like war, grifting and punishing people while claiming cuts save money.
biblioprof | 19 hours ago
They made this happen over 40 percent is the so called bBB and their war money
doctor_morris | 21 hours ago
The deficit hawks are in hibernation until the next administration.
dust4ngel | 18 hours ago
CNN anchor: "let's look at this video of the democratic president waving the american flag. does this look like a callback to the civil war, referred to by some as the war of northern aggression, and if so is this a call to violence against the southern red states?"
guest: "i think that's the only reasonable conclusion. by the way this constitutes terrorism, and there's no conscionable response other than impeachment at this point."
12darkmatter12 | 22 hours ago
russian/gop/israeli troll farms would be firing on every cylinder
Careless-Tough-676 | 21 hours ago
You realize trump has had nothing but a revolving door of billions most of which are not even from this country in and out of the White House?!
westicular | 20 hours ago
The billionaires are the ones wanting all this to happen. They'd be just fine with it.
Shaskakmat | 9 hours ago
Well the fall of the US into facism is also an historic crisis
morbie5 | 22 hours ago
> This is completely done by the regimes own making without outside forces.
Not all of it, Medicare spending spiked in July, that is out of Trump's control.
Does anyone know why Medicare spending went up so much last month?
Edit: This sub is so unbelievable ignorant. What I said above is 100% true. Medicare is on autopilot LMAO
Chipay | 5 hours ago
August 1st fell on a weekend. When the first of the month is a weekend, the government sends out benefit checks early to make sure they arrive on time.
Basically they prepaid a part of next month's expenses last month, good for $99 billion. The rest is an increasingly ageing population and inflation.
vertigo3pc | 18 hours ago
"Starting July 1, 2026, the temporary Medicare GLP-1 Bridge program provides limited coverage for certain GLP-1 weight-loss drugs for some people with Part D."
Could be that.
a_library_socialist | 22 hours ago
> while debt financing continued to be a significant contributor.
This is the part that's a real big thing - because debt crises became real scary when the debt starts impacting the ability to pay the debt, which causes the debt to increase, which . . . viscous cycle.
It also means that the government as a whole is going to be very constrained in dealing with inflation. Hard to raise rates when doing so is going to massively increase the deficit - and thus the amount you have to print to cover interests. That's actually what caused the German hyperinflation.
tryexceptifnot1try | 22 hours ago
The crazy part is the deficit is lower than it should be due to the income we're getting from draining the SPR. Once we hit the operational bottom it's going to push up the deficit even more while oil loses one of its price suppressors.
a_library_socialist | 20 hours ago
Yeah, I've sold index funds but not gold personally
ZEALOUS_RHINO | 17 hours ago
It almost feels like they are being balls to the wall fiscally irresponsible on purpose just so the democrats will have very little room to spend when they get back in power since the fiscal situation will be at a breaking point. Truly sadistic.
the_ai_wizard | 21 hours ago
And we know what happens next, sieg Elon
cheweychewchew | 22 hours ago
Trump has drained our treasury, our munitions, the stategic oil reserve, he's even destroyed the WH grounds with "renovation projects".
America's greatest threat is clearly in the WH
vertigo3pc | 18 hours ago
Yep, and we Americans let a flawed voting system continue, and 77 million Americans voted for him. Why? Because a black man was voted into the White House, and the boomer racism came online like a fucking spy asset hearing it's trigger. We let the government fall into a ditch of obstructionism, and we allowed our representatives to deliver less and less every year, while big tech and now AI takes whatever the fuck they want.
VanCityPhotoNewbie | 22 hours ago
Wasn't that one of the largest deficits because of all the covid money, freeze on loans, excess hospital spending and business tax freezes and breaks?
And this doesn't include the $1.5 trillion that is wanted for the military.
OrangeJr36 | 22 hours ago
Correct, there was a lot of stimulus to keep the economy from bottoming out, which was the biggest fear at the time. Still amazing we avoided it, even if the stimulus added to inflation a year later.
CriticalDiscipline4 | 22 hours ago
“lol maga maga you libcucks thought we cared about the debt, we just whanted to axe your dum woke policies, and all the stuff that helped black and brown people, lol lol maga maga maga lol lol”
PerfectZeong | 21 hours ago
"Ha you're triggered because we stripped Healthcare from millions of people, youre the real asshole here."
Fit-Bus2025 | 21 hours ago
This administration is gonna leave us with nothing once they are gone. Just watch. There will eventually be no more money for programs to help Americans.
ZEALOUS_RHINO | 17 hours ago
It almost feels like they are being balls to the wall fiscally irresponsible on purpose just so the democrats will have very little room to spend when they get back in power since the fiscal situation will be at a breaking point. Truly sadistic.
Fit-Bus2025 | 16 hours ago
Exactly! I was thinking the same thing. They want to leave us high and dry. By then, there will not be much left to help Americans in trouble.
voc0der | 19 hours ago
What is there now? He's just speed running a collapse and wealth transferring as we sit here and complain.
Fit-Bus2025 | 4 hours ago
True
alilhillbilly | 21 hours ago
Ok sure, but Jared Kushner's brother was able to buy The Lakers with stolen money so it's all working exactly as it should this is probably good for the country and we're going to have to just learn that what used to seen really stupid and almost like an intentional destruction of our country from the inside is actually some kind of genius.
PacificSanctum | 18 hours ago
Just loving it ! Standard macroeconomics says deficit spending is ok to lift an economy out of recession danger . But taking on debt in a hit and booming economy is a stark inflationary idiocy .
But the education level in the U.S. is so Joe that nobody there seems to know that . Worse , they have been VOTING for this .
Enjoy the ride then
Alex-Dawn | 17 hours ago
Just under $1.8 trillion YTD, but the July shortfall totaled $432.3 billion.
That's more than $5 trillion run rate, the AI bulls must be terrified (because OpenAI etc. love extrapolating run rates from cherry-picked months). In all seriousness it's no wonder the fed didn't hike interest rates.
UncleRicohSuave | 21 hours ago
People are panicking over the deficit while ignoring basic accounting.
**Government deficit = nongovernment surplus.**
The accounting identity is:
**(S - I) + (M - X) = (G - T)**
If the government spends $100 and taxes $90, it runs a $10 deficit. The nongovernment sector receives a net $10 financial surplus. Some goes to Americans, some to foreigners.
Treasury debt is also someone else's asset. A $100,000 Treasury bond is a **$100,000 financial asset** to its owner and a government liability.
That does NOT mean deficits never matter. They matter when spending pushes demand beyond productive capacity and creates inflation, or when resources are wasted.
The questions that matter are:
* What did we buy?
* Who received the income?
* Are real resources available?
* What happened to output, jobs, and inflation?
A scary deficit number by itself tells you almost nothing.
Federal finances are not household finances.
Typical-Meringue-890 | 19 hours ago
Most people seem to think it works just like a car loan.
Ateist | 18 hours ago
You have to look at actual resources, goods and services to understand what deficit really means - not at money.
I.e. if government wants more datacenters today, when the sector is at full utilization of capacity - it is extremely bad for the economy, but if government wants something that is well below 80% of utilization it is actually good for the economy.
$3.18 trillion of US government spending (77.9% of spending that is used on targeted physical resources) flows into highly utilized or constrained sectors, while just $900 billion (22.1%) targets underutilized or flexible sectors.
That's the bad part - U.S. government deficit is terribly structured, taking resources that are already in high demand.
And this structural imbalance have been worsening over the last 50 years: it was 51% to 49% in 1976, 61% to 39% in 1996, 69% to 31% in 2006 and 73% to 27% in 2016.
UncleRicohSuave | 18 hours ago
That’s much closer to the actual issue.
The constraint on federal spending is not dollars. It’s the availability of real resources for sale in dollars.
If government increases spending where labor, materials, energy, productive capacity, etc. are already fully employed, then yes, the additional demand can raise prices or displace private use. If those resources are idle, the same spending can increase output and employment instead.
But I’d be careful with the claim that 77.9% of federal spending is going into “highly utilized sectors.”
First, most federal spending is not the federal government directly buying physical resources. Social Security, Medicare payments, interest payments, grants and other transfers add income to the nongovernment sector. Their inflationary effect depends on what recipients subsequently spend and what they buy.
Second, an 80% capacity-utilization number is not a meaningful economy-wide inflation threshold. Capacity constraints are specific. You can have spare aggregate capacity while simultaneously having shortages of electricians, transformers, nurses, semiconductors or defense production.
So the relevant question isn’t:
“How big is the deficit?”
And it isn’t even simply:
“What percentage of government spending goes to sectors above 80% utilization?”
It’s:
What specific resources is the spending causing the government or private sector to bid for, are those resources already fully employed, and can supply respond?
That is where inflation risk comes from.
The accounting still stands:
Government deficit = nongovernment financial surplus.
That tells you the financial result.
Real-resource analysis tells you whether the spending associated with that deficit is inflationary, productive, wasteful, or some combination of the three.
Those are two different questions, and neither invalidates the other.
Ateist | 18 hours ago
> But I’d be careful with the claim that 77.9% of federal spending is going into “highly utilized sectors.”
That's purely Google AI estimation based on data of capacity utilization by economical sectors and government spending.
Would be nice to see actual scientifically rigourous data though.
baverdi | 17 hours ago
What is the current answer to those 4 question?