On September 13, 2018, Andrew Mayeda writes on Bloomberg:
The U.S. budget deficit widened to $898 billion in the 11 months through August, exceeding the Congressional Budget Office’s forecast for the first full fiscal year under the Trump presidency.
The budget deficit rose by a third in the October to August period from $674 billion in the same timeframe a year earlier, the Treasury Department said in a statement on Thursday. Spending rose by 7 percent to $3.88 trillion, outpacing revenue gains of 1 percent to $2.99 trillion. Revenue from corporations fell to $163 billion, down by $71 billion from a year ago.
The U.S. fiscal gap has continued to balloon under President Donald Trump, raising concerns the country’s debt load, now at $21.5 trillion, is growing out of control. A combination of Republican tax cuts enacted this year — that will add up to about $1.5 trillion over a decade — and increased government spending are adding to budget strains.
The White House says the tax cuts will pay for themselves by creating more revenue through faster economic growth. The International Monetary Fund has warned the tax reductions risk putting the nation’s debt on an unsustainable path and could cause the economy to overheat.
The 2017 fiscal gap was $666 billion, up from $586 billion a year earlier, according to the Treasury department. The CBO, a non-partisan congressional research body, estimated in April that the budget deficit for the entire fiscal year would increase to $804 billion, before widening to $981 billion in fiscal 2019 and topping $1 trillion in 2020.
Before the CBO incorporated tax cuts and spending hikes into its projections, the group forecast the U.S. deficit would exceed $1 trillion by 2022.
Gary Reber Comments:
Unfortunately, we have become a nation of “inventing” money (“debt”) by the government that is not connected to productive capital (asset) growth and the aim of creating universal individual citizen ownership of a future economy that can support general affluence for EVERY citizen.
Instead, blank checks are written to pay for unlimited wars that fatten the industrial-military complex’s wealthy capital ownership class; a $2 trillion tax cut for the same wealthy capital ownership class so that they can become even more wealthy; and other taxpayer loan guarantees, grants, subsidies, tax incentives and tax loopholes, which deplete the ability to pay for legitimate government services such as universal education through college and university for our children, universal healthcare for our citizens, developing renewal energy to ensure we can be responsible custodians of our part of the world’s environment while also enhancing our environment, and eliminating and preventing barriers for EVERY child, woman and man to become an owner of constantly forming new productive capital using self-liquidating capital credit.
The reality is we are not addressing morally-right priorities, but instead what furthers the wealth ownership concentration of the 1 percent of Americans who wield economic and political power.
Our government is manipulating the value of our currency and creating inflation by issuing debt-money (government contracts representing a vague promise to pay out of future taxes, or “debt backed by debt”) in place of a monetary system based on asset-money (private sector contracts representing an obligation to deliver a specific amount or value of goods and services, or “debt backed by assets”). Ordinary Americans have become subject to the whims of the economically and politically powerful, whether in the narrowly-owned private sector (capitalism) or the public sector (socialism). Added to the growing concentration of capital ownership in fewer and fewer hands and concentrated control over the means of acquiring and possessing productive capital, manipulation of the monetary and tax systems are a disaster for ordinary people.
To responsibly pay for government to address morally-right priorities, we need a tax system in which all income of individuals, not just wages and salaries, would be considered “earned.” Thus, property incomes would be included in the definition of “earned income.”
Dividends on public for-profit corporate shares need to be tax-deductible to the corporation, encourage full dividend payouts with the result of increasing individual taxable incomes. If required the corporate tax rate should be raised to 90 percent to encourage full dividend payouts to their owners. This would give corporations a socially beneficial way to escape double and triple taxation on corporate profits, and would induce new share issuances for financing new productive capital assets.
The Federal Reserve System needs to employ its discount powers under Section 13 of the Federal Reserve Act of 1913 so that member banks could make lower-cost, asset-backed, “non-recourse” self-liquidating capital credit loans to enable EVERY citizen to invest in newly issued, full dividend payout, full voting shares voluntarily issued by “eligible” private sector corporations. Such shares would finance a growing portion of the nation’s annual growth needs for new technologies, new plant and equipment, real estate development, new infrastructure and renewal energy. Democratized capital credit would also free economic growth from both government subsidies and the “slavery of past savings.” It would offer all Americans a means of accumulating individual capital estates through “future savings” of the earnings from their own capital assets. [See “A New Look at Prices and Money: The Kelsonian Binary Model for Achieving Rapid Growth Without Inflation” at http://www.cesj.org/wp-content/uploads/2013/11/pricesandmoney.pdf.]
For a major part of the legislation needed to shift from an economy based on “inventing” money (“debt”) by the government to an economy connected to productive capital growth and government paid for through just taxation, see Monetary Justice at http://capitalhomestead.org/page/monetary-justice and the proposed Capital Homestead Act (aka Economic Democracy Act and Economic Empowerment Act) at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/. And The Capital Homestead Act brochure, pdf print version at http://www.cesj.org/wp-content/uploads/2014/11/C-CHAflyer_1018101.pdf and Capital Homestead Accounts (CHAs) at http://www.cesj.org/learn/capital-homesteading/ch-vehicles/capital-homestead-accounts-chas/.
Also see “Capital Homesteading For Every Citizen” at http://www.cesj.org/wp-content/uploads/2012/05/CapitalHomesteadingForEveryCitizen.pdf.
