The US government debt has grown overnight from 20.494 trillion dollars to 20.669 trillion dollars. This is a sudden increase of $175 billion! We had been speculating about this massive leap some days ago. But we had estimated that it would be much bigger. But what happend not yet, can happen in the next days and weeks!
The reason for this sudden leap: After the US Congress had agreed that the big debt party in the US could continue, expenditure on pension obligations, for example, etc, which have been postponed or suspended in the past few weeks for accounting purposes, have now simply been rebooked in one fell swoop. The debts were already there, but not officially booked. Now where the US Treasury Department is officially allowed to press the debt pump again, this expenditure is visibly rebooked in the official history register of the US Treasury Department, where it´s possible to trace the US national debt from day to day for years.
This jump of $175 billion in US government debt occurred immediately after the agreement reached in the US Congress on February 8-9. It´s only visible today because the most recent days are always published two to three working days later.
The US budget
The White House budget office has also sent it´s current debt plan of the next few years to the US Congress. It states that debts without a new budget plan would rise to 27 trillion dollars by 2028 (now, as we said, 20.67 trillion dollars). Without a new plan, the US budget deficit in fiscal year 2019 would be $1 trillion – this is just the number for one year (more expenditure than revenue).
But since the president wants to save money (laughing…), the “Office of Management and Budget” is able to reduce the deficit by 3 trillion dollars in the next 10 years. That would be $300 billion less deficit per year. This is still a gross annual deficit of 200 billion dollars per year, at least! And the assumptions of Trump’s budget builders are based on GDP growth of over 3% per annum. What if it’s only slightly lower? With the already processed tax cuts (lower revenues), we are quickly talking about $30 trillion in government debt. When? This can´t be predicted with such large variable sums of money. But the US national debt under Bush and Obama showed: It often goes much faster than you think!