Our national debt has swelled to a record $21.16 trillion as of this writing. That includes debt held by the public ($15.4 trillion) and intra-governmental debt ($5.7 trillion). At $21+ trillion, our national debt is well above 100% of our Gross Domestic Product of $19.97 trillion.
Once each year, the Trustees of the Social Security and Medicare trust funds are required to provide a detailed status report to Congress, including financial projections well into the future. The latest reports were provided to Congress last week. There was good news and bad news, as usual.
A surprising new report from a respected independent research group in Switzerland concluded that the United States has regained its position as the #1 nation in its global competitiveness ranking. This accomplishment was not expected and has not been widely reported in the mainstream media – no surprise there.
The government reported earlier this month that the US birthrate fell to the lowest level since 1987 last year, despite an increase in the number of child-bearing age women in the population since then. The government also reported that the “fertility rate” – the number of births per 1,000 women – fell to the lowest level in almost a century in 2017.
Today, I want to disagree with a widely-held view by the mainstream media and President Trump that trade deficits are always a bad thing. I also want to disagree with the idea that trade deficits with the US mean that our trading partners are taking advantage of us.
The Treasury Department announced last week that the government borrowed a record $488 billion in the January-March quarter. The Treasury said that actual borrowing in the 1Q exceeded the old record of $483 billion set in the first quarter of 2010 – the period when the country was struggling to pull out of a deep recession and prop-up the financial system following the 2008 financial crisis.
Today we’re going to look at how Washington spends our tax dollars. Specifically, we’ll look at a new report which shows how the federal government spends the income tax paid by the average family – and how they spend even more than what’s collected to create massive budget deficits year after year after year.
While the final figures are not out yet, it is widely estimated that Americans spent well over $3.5 trillion (17% of GDP) on healthcare last year, and that figure is estimated to rise to $5.7 trillion (20% of GDP) by 2026, if not sooner.
We’ll touch on several bases today which should make for an interesting E-Letter. We start with the fact that China and Japan are reducing their holdings of US Treasury debt. As the two foreign countries holding the largest amount of our debt by far, should we be concerned? Maybe yes, maybe no.
The White House announced late last week that President Trump will enact new protectionist tariffs of 25% on imported steel and 10% on aluminum. This move set off fears of a new trade war as foreign trading partners most affected by the new tariffs are expected to retaliate with new tariffs of their own that will hurt US industries.