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'A Crushing Burden of Debt'? US Deficit Approaches $1 Trillion Mark, Highest in 7 Years

10-08-2019

The federal deficit is the highest it's been in seven years. 

The Congressional Budget Office is estimating it at $984 billion for fiscal 2019 - that's $205 billion higher than last year.

Despite continued economic growth and the incredibly low unemployment rate, the 26 percent increase is the highest since 2012.

And, the overall national debt is near the $23 trillion mark.

Budget hawks note the main drivers of the deficit are entitlement programs like Social Security, Medicare and Medicaid. But there's also wasteful spending going on too.

Writing for the Heritage Foundation, Romina Boccia says, "Without budget limits, anything goes, including wasting hard-earned taxpayer dollars on frivolous and wasteful activities. The feds doled out $150 billion in improper payments last year. And year after year, they overpay for infrastructure projects by giving sweetheart deals to unions with project-labor-agreements and rules such as the Davis Bacon Act, which sets inflated wage rates. Taxpayers deserve better." 

"Polls show large majorities support limits on federal spending, as well as limits on how much Congress can run up the national debt. Both will be necessary if we are to protect younger and future generations of Americans from inheriting a crushing burden of debt and taxes," Boccia added. 

But, others believe the nation's debt crisis isn't fatally flawed and that it was far worse in previous decades.

Ken Fisher, founder and executive chairman of Fisher Investments, writes in USA Today, "Government solvency isn't about paying off debt. It's about affording interest payments and rolling over maturing bonds."

He says the US is easily able to afford the interest payments and that the burden from those payments is less now than in previous decades. During the 1980's and 1990's, the US interest payments made up 18.4 percent of tax revenues, significantly higher than the current 9.8 percent. 

"For debt to become a problem, Uncle Sam must spend like a drunken sailor for decades (which he may)," Fisher writes.

Since President Trump took office, the GOP has passed a hefty tax cut package that reduced immediate revenue but boosted economic growth. Supporters say that has led to increased overall revenue for the government because of the improved economy. 

Meanwhile, Democrats and Republicans have agreed to raise spending year after year. 

The final Treasury Department details for the fiscal year, which ended on September 30, will be published at the end of October. 

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