Both parties are happy with the spending deal reached Tuesday night between the Trump administration and the Pelosi-controlled House. The Trump administration will see defense spending going to $750 billion while the Dems (and, admittedly, some in the GOP) will see an equivalent increase in domestic appropriations.
What not discussed was that outyear budget deficits will be massive—projected to be $17 trillion over 10 years, and that’s if there is not recession in those 10 years, which is highly unlikely.
Based on the Treasury’s latest estimate, spending will rise from $4.108 trillion in FY 2018 to $4.529 trillion in FY 2019 (ending this September). That’s an increase of $421 billion, or 10.3%, the highest percentage gain since the Obama “shovel ready” stimulus budget of FY 2010.
However, revenue is projected to rise only $109 billion—from $3.329 trillion last year to $3.438 trillion this year. The resulting gain of just 3.3% is barely above the year-over-year inflation increase of about 2%, and makes a mockery of the theory that tax cuts pay for themselves and that you can “grow your way out” of the deficit.
Spending is out of control in D.C., and since the dollar became unredeemable in gold (1971), there have been three major bullion markets in gold and silver. Now, deficit spending is locked in for the next ten years, and the Fed appears set to lower interest rates at their next meeting (July 30-31).