Bad Budget

The omnibus spending bill passed by Congress guarantees the government won’t shut down, that’s good. Unfortunately, it increases spending and that’s bad. Specifically, discretionary spending in FY23 will rise to $1.65 trillion up from $1.5 trillion in FY22, an increase of 10%, a real increase of 3%, or $50 billion, 0.2% of GDP. With the Fed fighting inflation, Congress could have helped by cutting spending, making the Fed’s job easier.