Deteriorating Deficit

The CY2019 deficit is $1.02 trillion and Y-o-Y it grew 17.1%. While that’s down from a 28.2% rise in 2018, it’s no reason to celebrate. In 2018, tax cuts dramatically reduced revenues. In 2019, revenues rose 5%, but expenditures rose by a still larger 7.5%. The deficit is now an uncomfortable 4.7% of GDP, and rising, up from an already large 4.2% in 2018. Traditionally, deficits always shrank in recoveries.

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