Third Quarter of Record Deficits

The Treasury Department will need to borrow $361 billion in Q2, a record for the April-June quarter (see Investment News article), making for three straight quarters of record borrowing. The Treasury is also estimating it will need another $515 billion in Q3. The projected federal deficit for the year ending Sept. 30 will come to $1.75 trillion, another record, and quadruple the previous $454.8 billion deficit set last year - which was also a record. The national debt is currently at $11.1 trillion, but new limits will be raised to $12.1 trillion to account for the increased spending and borrowing.

The numbers are simply staggering, and make the recent proposal by the President to reduce the budget by $100 million seem to be just a drop in the bucket (see Washington Post article). In fact, regardless of your views on the $100 million, and spending cuts in general, a recent Youtube video gives you an idea of the size of the current budget, borrowing, and deficits, and shows you just how much (or little) $100 million amounts to (see YouTube video). Staggering indeed.