CBO report indicates increased deficits and national debt

August 23, 2019 - 7:24 am

The Congressional Budget Office this week issued a gloomy report on the nation's finances that should surprise no one who is familiar with deficits and the national debt.

The CBO predicts average national deficits of $1.2 trillion every year through 2029, due in large part to recent budget and border security bills. The national debt was greater than $22 trillion at the end of June, according to Pew Research. Elected officials seem to be largely AWOL on the subject.

"This was something that was high on the political agenda just a few years back," said Dr. Chris Kuehl, managing director of Armada Corporate Intelligence. "It was the originator of the whole Tea Party movement and it's since kind of faded."

--Reality check: Spending, not tax cuts, are driving national deficits.https://t.co/jlV1D9ZHtN

— Ways and Means GOP (@WaysandMeansGOP) August 22, 2019
Kentucky Senator Rand Paul recently proposed an amendment to the budget bill which would have imposed spending caps, but it failed by greater than a two-to-one vote.

As a candidate, President Donald Trump promised to wipe out not only the deficit but the entire federal debt. Big deficits can lead to future problems with other nations, a lot of countries operate in  the red, Kuehl said.

"The real dirty little secret is that the U.S. can essentially borrow, indefinitely, as much as it wants," Kuehl said. "We are the coveted treasury bonds people, so as long as the United States stands behind its bonds, which it will, then we can always make money that way." 

Deficits can affect consumers because they can bring about inflation when the Federal Reserve is forced to pump more money into the economy.

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