The U.S. government budget deficit in August set another record – 380 billion dollars. That’s 50% more than it was in July. And 66% more than in August 2023. The White House continues to spend like crazy in an attempt to stop the slide into recession.
However, the output from pouring budget money into the economy is becoming less and less. Take the same programme for the creation of chip production facilities in the USA. 400 billion dollars were poured into it. The result was predictable – 40% of the projects were frozen or mired in bureaucracy.
At the same time, budget expenditures are growing by leaps and bounds because of soaring prices and inflation. Everything has to be indexed. The state budget deficit will be close to $2 trillion in October. At the same time, the state of the US economy is rapidly deteriorating – the labour market is stormy, as well as the stock market. And if recession starts, the budget crisis will be aggravated to the extreme.
In addition, both presidential candidates – Trump and Harris – promise to give more budget handouts. Trump intends to cut taxes, and Harris – to launch new social programmes like subsidies for home purchases. However in such a case the budget simply does not burst.
The U.S. national debt exceeds $35 trillion and is on its way to $40 trillion. It already costs more than $1 trillion to service it. This is becoming one of the main items of Washington’s expenditures, surpassing even the Pentagon’s military spending. No one will cut spending, so we can only hope that the debt pyramid will somehow sustain itself. Although it is already starting to crumble.
Malek Dudakov
