Biggest US Budget Deficit Since 2012 Stokes Inflation Outlook

Mar 13 11:03 2018 Print This Article

The US federal government on Monday reported its biggest budget deficit in February in six years. By some accounts, the news offers another reason for projecting that Washington’s red ink and inflationary pressures will heat up in the months and years ahead.

Some analysts warn that the tax cuts enacted last year will raise the government’s debt load in the years to come. One estimate projects that the reduction in tax rates will cut federal revenue in excess of $1 trillion over the next decade. There was a degree of support for that estimate in yesterday’s Treasury data, which reflected a 9% slide in revenue in February vs. the year-earlier month, in part because withholding taxes were 2% lower, MarketWatch reported. Meanwhile, spending linked to net interest on the public debt jumped 9%.

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About Article Author

The Capital Spectator

CapitalSpectator.com is a finance/investment/economics blog that’s edited by James Picerno. The site’s focus is macroeconomics, the business cycle and portfolio strategy (with an emphasis on asset allocation and related analytics). In late-2009, the Eastern Economics Journal named Picerno as one of the nation’s “top economics bloggers”. Picerno is the author of Dynamic Asset Allocation: Modern Portfolio Theory Updated for the Smart Investor (Bloomberg Press, 2010) and Nowcasting The Business Cycle: A Practical Guide For Spotting Business Cycle Peaks (Beta Publishing, 2014). His articles on finance and economics have appeared in a variety of publications and news outlets over the years, including The Atlantic, Financial Advisor, BankRate.com, HorsesMouth.com, and Bloomberg Briefs: Economics. He also pens a daily economics column for the Saxo Group’s TradingFloor.com web site. Picerno has been writing about investing and macroeconomics since the early 1990s at Bloomberg, Dow Jones and other media groups before becoming an independent writer/analyst in 2008. He also offers consulting services on asset allocation and portfolio strategy, the US business cycle, and related data analytics in R and Excel.

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