The Federal Government's Spending Addiction
The Federal Government spends money more foolishly than an NBA star with a luxury watch and hypercar addiction.
The Federal Government has spent $4.5 Trillion through May 31st, up 8% over the same period in fiscal 2023.
The Federal Government is running a $1.2 Trillion fiscal deficit year-to-date, up 3% over the same period a year ago.
This spending will cause the Treasury markets to slam on the brakes at some point as no sovereign nation will want to hold U.S. paper. When it happens it will be ugly as 10-Year Treasury yields will spike seemingly overnight and will rise to a level that will force the Federal Government to put the brakes on. That is win politicians will be forced to curtail spending on Social Security, Medicare and Medicaid. That day is coming as sure as the sun rises. It is unavoidable arithmetic.
What are the fools in Washington spending money on? The top 10 categories are below. By the way, the Net Interest expense line will grow over time (until the Fed cuts rates) as Treasuries are rolling over at higher rates.
Frankly, I am shocked that investors are willing to hold 10-year Treasuries at a 4% yield as who knows what sort of fiscal mess the U.S. Government will be in 10 years hence given another Trump or Biden Administration. I am not confident that there are 10 people in Washington that understand that the United States’ $35 Trillion debt position presents an existential risk. For a Treasury secretary to not address the U.S.’s multi-trillion Dollar deficits is more than laughable. It is treasonous.