The United States government is on course to borrow $832 billion this year according to an estimate by the Treasury during the monthly income and spending statement for June.
The Treasury says a total of $2.5 trillion has been collected so far in taxes with the yearly period beginning in October 2017 up to June 2018.
July, August and September is estimated to bring another $800 billion, making it a yearly total of $3.3 trillion, with June alone costing taxpayers $316 billion.
For the past nine months, $3.1 trillion has been spent, creating a deficit of more than $600 billion so far. The remaining three months are expected to add another $230 billion in deficit spending, with June alone having a deficit of $75 billion.
Almost half a trillion of the $2.5 trillion has been spent on the military in the past nine months. That means the US government is allocating 20% of all income to the military.
That makes “Defense” one of the single biggest expenditure of American taxpayers. Education, in contrast, receives a mere 2% of all raised income taxes, and just about 10% of the military’s budget, with the United States spending merely $50 billion a year to educate the children of America.
Around five times more than the education budget is spent on interest on the current $20 trillion debt which is now growing at almost a trillion per year.
That makes interest payments about half of the deficit. In the past nine months, America’s government has borrowed $607 billion, and $265 billion of it has gone towards paying interest on debt according to the Treasury statement.
Interest, not the principal of $20 trillion. The principal merely changes hands, primarily between bankers, with new debt added to it at an astonishing rate while the economy is booming with growth at 4%.
Making all this unprecedented. Only during the first and the second world war was the deficit so high, yet Trump might add even more to it by increasing “defense” spending even further.
In addition, interest payments might go up because FED is looking at increasing interest rates, making the situation worse even while times are good.
If the stock market turns, as it does now and then, the situation might get worse than the 70s when New York went bankrupt and bankers took over the running of that state.
Back then, inflation went to nearly 20%. Rubbish bins went uncollected due to ruthless spending cuts. Universities became debt pit-holes with the young now effectively needing two mortgages to buy a home. And among many other aspects, wages have not yet recovered in real terms now half a century later.
Making all this higher and higher borrowing a reckless endeavor for which we all will have to pay for sooner or later. Well, almost all. Jeff Bezos’ Amazon will probably still keep paying just 6%.