The United States budget deficit has doubled under President Joe Biden; hitting $1.6 trillion in the first 10 months of the fiscal year. The continued deterioration of the fiscal state of the U.S. is another blow to Bidenomics, the set of economic agenda items that the Biden White House has pinned their re-election hopes on.
In a thread on X (formerly Twitter), economist EJ Antoni explained that the U.S. Treasury “…continues hemorrhaging cash as spending balloons, receipts fall; deficit and interest on the debt keep rising.” Antoni noted net interest payments on the U.S. debt exceeded spending on national defense, medicare, veterans benefits and services, and transportation.
Even more concerning is that the Fiscal-Year-To-Date’s deficit is already $238 billion above the last Fiscal Year’s entire deficit. There are still two months remaining in the current Fiscal Year.
The negative news on the U.S. deficit only darkens the storm clouds over the U.S. economy. The July Consumer Price Index numbers signaled a re-acceleration in inflation – despite many in the mainstream media claiming that the inflation crisis was over. In response to the re-acceleration of inflation in July, Antoni stated:
The CPI has risen so much faster than wages under Biden that the average American worker effectively paid a $4.62 an hour inflation tax in July. And yet, many components of the CPI are understating the realities faced by Americans, including housing. The monthly payment on a median price home today is twice what it was in January 2021.
Last wee, Fitch Ratings downgraded U.S. government debt from AAA to AA+ and projected the American economy would enter into a recession in late 2023 or early 2024.