What I Learned This Week

The U.S. federal deficit blowout: receipts are tracking lower than planned but outlays are tracking higher. What are the implications?

In the February 8th and March 8th WILTWs, we warned about the risk of higher-than-expected deficits, rising interest expense and mandatory entitlement spending, and the coming avalanche of U.S. Treasury bond issues. So far, the trends are even worse than expected, even though reported GDP growth has ticked higher.  Consider the following: According to the latest U.S. Treasury Department estimates, total budget receipts for FY 2018 and 2019 are currently pegged at $3.322 trillion and $3.424 trillion, respectively—0.5% and 2.0% below the President’s budget estimates (per the CBO) of $3.339 trillion and $3.493 trillion, respectively. The Treasury’s total budget outlays for FY-2018 and 2019…

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