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U.S. CBO says budget deficit to reach $590 billion for fiscal 2016

gdgyva

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The U.S. budget deficit is expected to grow to $590 billion in fiscal year 2016 due to slower than expected growth in revenues and higher spending for programs including Social Security and Medicare, the Congressional Budget Office said on Tuesday.

The estimate, which is $56 billion larger than CBO's forecast in March, shows the deficit increasing in relation to economic output for the first time since 2009. CBO said the deficit is expected to be $152 billion higher than in 2015 and will equal 3.2 percent of economic output.

The deficit peaked at $1.4 trillion in 2009 and shrank to $485 billion in 2014.

The nonpartisan research agency also said that debt held by the public will amount to nearly 77 percent of gross domestic product by the end of 2016, three percentage points higher than last year and its highest ratio since 1950.

U.S. CBO says budget deficit to reach $590 billion for fiscal 2016 - AOL

and our grandkids keep getting deeper and deeper into debt

one of these days, those iou's will come do

the rates will jump, and all hell will break loose

and i pity those that will have to deal with it
 
And? How are we going to change it? For decades we've elected the Republicans and Democrats, and after decades of their rule, this is where we stand. The status quo is not going to change the status quo. And regardless of Trump or Hillary, the next President is still going to grow our deficit.
 

Remember when this happened under Bush and it was UnPatriotic?
 

Constitutional amendment. But that requires informed citizens.
 

we have to stop spending like a teenager that just stole their parents black amex card

and that means we need to LOOK at everything

every department....every expenditure

i read a report a number of years ago where the same stuff is done time and time again by different agencies...just duplicating efforts

just wasting money...OUR money

we need to spend where necessary, and curb it where it isnt

and we need to do it now....while we still can right the ship

i think it is possible....difficult but possible

but that means electing people who actually want to REDUCE spending...and i dont care if they have a R or a D next to their name
 
jonny5 said:
Constitutional amendment. But that requires informed citizens.
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Constitutional amendment for what? Just so this post isn't empty, I'll assume you meant balanced budget, but an informed citizen would never vote for a balanced budget Constitutional amendment.

If I'm wrong about what you want an amendment for, please let me know.
 
Right around the time Rome ceased being a Republic and became an Empire a few folks decided that if they were truly to be a great government they must provide great works for the people. They build a Colosseum, had marvelous shows and grand parades. It was all to show how wonderful Rome could be if the greatest leaders were allowed to run things on their own terms. Things went along OK from there for roughly 100 years until it all imploded.
 
Ikari said:
And? How are we going to change it?
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1. Entitlement Reform to bend the expenditure curve down
2. Regulatory and Tax Reform to increase revenues
 
Entitled, dependent constituents be expensive, yo.
 
gdgyva said:
and our grandkids keep getting deeper and deeper into debt

one of these days, those iou's will come do
Click to expand...

Are you familiar with T-Bills, notes, and bonds?

They come due all the time. The government pays these debts by selling new treasury securities.

As long as people are willing to buy them (eg. believe the government will repay the borrowed money), we will be fine.
 

And when the fed finally stops screwing with rates, and they normalize back to the 5 percent range....what does that do to our already busted budget?

Just how much can we put on the credit card?

30 trillion?

50 trillion?

What number starts making the debt a real real problem for those of you that believe it isn't one right now?

How much of our GDP can we pay to debt interest before it begins to worry you guys?

Inquiring minds want to know
 
gdgyva said:
And when the fed finally stops screwing with rates, and they normalize back to the 5 percent range....what does that do to our already busted budget?
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The current 30 year bond rate is 2.24%. Don't expect rates to "normalize".

That being said, I agree that when interest rates go up, the government will certainly have to spend more on interest.


Depends on how large our economy is. With 2% annual GDP growth and 2% annual inflation, our country's GDP will double every 18 years. So if our national debt is $40 trillion in 2034, our government will be in just as good shape as it is today.
 

rates aren't going to stay this low forever

And our historical normal is around five percent

But then we have had times of much much higher rates....think back to Reagan era

I remember paying 15% for a car loan with perfect credit....young and stupid back then

I don't know when it will happen, but it will happen....they will go back up

And then our debt service is going to eat more and more of the budget

When? I dunno....3 years? 5 years? But it is coming
 

Yup. Anyway, by definition, a 30-year treasury interest rate is determined by what the projected average interest rate will be over the next 30 years.

So the Federal Reserve apparently does not anticipate having 5% interest rates much over the next 30 years.

If they projected 1% for 15 years and 5% for 15 years that would be a 3% 30-year interest rate (roughly). The 30-year interest rate is less than that.
 
99percenter said:
Tax activists like Grover Norqhuist don't want it. It will just lead to higher taxes.
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So does trillions in debt. At least if we force congress to balance, then we can complain about taxes because we feel it. We dont really feel debt.
 

But honestly, how likely are they to have a D next to their name?
 
countryboy said:
But honestly, how likely are they to have a D next to their name?
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there are a couple, but they are rare birds

but way too many of the ones with an R next to their name spend like crazy too

someone has to take away the credit cards....

we cant just keep spending like this....and medicaid and social security are going to get worse
 

really...bonds work like that do they

i wonder how that worked out for the people that thought the rates would average out to 12% which is what the fed rate were in 1981 for the next 30 years

think they missed by just a wee bit on that didnt they?
 

So what happens when the cost of rolling over debt quintuples?
 
cpwill said:
Remember when this happened under Bush and it was UnPatriotic?
Click to expand...

Remember when this happened under Obama and it was unpatriotic?
 
gdgyva said:
The U.S. budget deficit is expected to grow to $590 billion in fiscal year 2016 due to slower than expected growth in revenues and higher spending for programs including Social Security and Medicare, the Congressional Budget Office said on Tuesday.
Click to expand...
C'est la guerre.


The deficit peaked at $1.4 trillion in 2009 and shrank to $485 billion in 2014.
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Do you know about shrinkage? lol

I love how we've cut the deficit roughly in half in just a few years, and it's still touted as a nightmare.

What I love even more is that conservatives have decried deficits and debts for well over 30 years, and the disasters they predict keep Not Happening.


and our grandkids keep getting deeper and deeper into debt

one of these days, those iou's will come do

the rates will jump, and all hell will break loose
Click to expand...
That's not even remotely how it works.

Government debt is not like credit card debt. No one is demanding that the federal government retire all of its debt by 2030. In fact, the private markets would lose their minds if the US government stopped borrowing money.

Government debt rolls over, and is constantly churning. The Treasury Department offers securities ranging from 3 months to 30 years; people buy these securities at near-zero interest rates because they are seen as rock-solid.

It is theoretically possible for the government to borrow so much that we can't pay the interest, but the odds on that seem very low. E.g. Japan, while not in the greatest of shape, has a debt-to-gdp ration of around 200% and still has no problems borrowing at very low interest rates.

While it is true that we cannot spend like a drunken sailor on shore leave forever and ever, we can recognize that the situation has improved dramatically since 2009, and discuss reasonable means of reducing spending without the histrionics and fear-mongering.

If nothing else, it should be clear that screeching "OUR KIDS WILL OWE QUADRILLIIONS!" has utterly failed to motivate anyone to reduce spending. And that includes conservatives who hold the federal government's purse strings. So, maybe try a different approach next time.
 
gdgyva said:
really...bonds work like that do they

i wonder how that worked out for the people that thought the rates would average out to 12% which is what the fed rate were in 1981 for the next 30 years

think they missed by just a wee bit on that didnt they?
Click to expand...

Nobody said projections are always right. :shrug:

Also, keep in mind that the 12% bonds weren't indexed to inflation, which takes away a sizable portion of the returns.

cpwill said:
So what happens when the cost of rolling over debt quintuples?
Click to expand...

My guess? They'll start issuing callable bonds, and then retire any high interest rate debt that isn't held by SS/Medicare as soon as interest rates drop.
 

of course our debt rolls over....and we keep adding to it

now 18 trillion....at a cost of 223 billion or 6% of the budget in 2015

how much of the budget is okay to spend on interest alone before you get worried?

10% 15% more?

how much total debt before you guys go woah, maybe we are getting a little deep?

30 trillion? 50 trillion?

the fed has been keeping rates artificially low for what 6-7 years now?

what happens as they normalize back to the 5% range

hell...what happens if inflation rears it's ugly head and they hit 8 or 9%...or higher?

yeah...we conservatives are worry warts...

we save, and plan for rainy days....

we dont bury our heads in the sand and pretend that debt isnt an issue at all, and never will be

and you cant say for sure it wont be....hell, you cant even be 50% sure if you are truthful to yourself

it might not be for 5, 10, even 20 years....but there will come a day if we dont do something to stop the madness

but then that would be admitting a problem....a spending problem....and we cant have that now, can we?
 
gdgyva said:
one of these days, those iou's will come do

the rates will jump, and all hell will break loose

and i pity those that will have to deal with it
Click to expand...

The rates cannot jump without requisite economic growth and inflation; those two combining factors will reduce this so called debt burden. You just lack the understanding of this topic you choose to discuss.
 
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