Happy February to all! Just a couple things in the hopper today.
First off, Chris Edwards of Cato is not lulled by the
Federal Budget Outlook: Worse than CBO.
The Congressional Budget Office has released new projections for federal spending and revenues through to 2030.
Federal budget policy is a disaster. The government will spend $4.6 trillion this year, raise $3.6 trillion in tax revenues, and fill the gap with $1 trillion in fresh borrowing. That is like a worker earning $36,000 in income but spending $46,000 and putting $10,000 on credit cards. Maybe he can get away with the excess spending for a while, but eventually his finances will crash.
The CBO’s baseline projections show spending rising faster than revenues in coming years, with the result that annual deficits by 2030 are expected to hit $1.74 trillion. Spending in 2030 at $7.49 trillion will be 30 percent higher than revenues of $5.75 trillion, as shown in the chart below.
Bottom line: "We are marching into a fiscal crisis and our elected leaders seem to have no idea how to tackle it and do not even seem to care."
Just hold off until after I see the new James Bond movie, OK?
Veronique de Rugy's column has perhaps 2020's least surprising
Trump's Derivative Tariffs Continue Faulty Narrative.
The Tariff Man has done it again. President Donald Trump recently announced that he will expand import taxes on American consumers of auto parts, nails and other goods made in the United States with steel and aluminum. Apparently, untaxed imports of these metals put our national security at risk.
Under the latest proclamation, some imports of products made with aluminum will be subject to an additional 10% tax, while some steel products will be hit with a 25% one. The decision comes two years after the first round of steel and aluminum tariffs, a little over a month following the United States-Mexico-Canada Agreement's approval by the U.S. Congress, two weeks after Trump signed a phase one trade deal with China and while the U.S. government is in the middle of some trade negotiations with the Europeans.
Veronique predicts "sour results".