Yesterday Investor’s Business Daily posted an editorial about the growing federal deficit. The numbers in the editorial tell the story of what is actually happening:
Each month the Treasury Department releases its tally of federal spending and revenues. The most recent data are through the month of August. Since the federal government starts its fiscal year in October, the latest report includes all but one month of the 2018 fiscal year.
What do the data show?
Through August, the federal deficit topped $898 billion. Over the same period last year the deficit was $674 billion.
So, the deficit is running $224 billion higher this fiscal year compared with last.
But the Treasury data also show that federal revenues through August totaled $2.985 trillion. That’s an increase of $19 billion over the previous year.
In other words, despite Trump’s massive tax cuts, federal revenues are running higher this year than last.
The problem is that federal spending has climbed even faster. Through August, outlays totaled $3.88 trillion. That’s $243 billion more than the prior fiscal year.
…The Treasury data show that while corporate income tax receipts are down, individual income tax revenue is up by $100 billion — a 7% gain — over last year. Payroll taxes are up by $5 billion. Revenues from excise taxes and customs duties are also up.
So, while corporations are paying fewer taxes, they’re hiring more workers and paying them more, which is generating additional income and payroll taxes. This is exactly what advocates of the tax cuts predicted would happen.
As Kudlow explained in his remarks, increased growth has “just about paid for two thirds of the total tax cuts.”
The article goes on to illustrate that government spending is totally out of control. Until the spending drops, the deficit will not decrease. Those of us who voted for Republicans expected them to stop the runaway spending. If they continue to spend like drunken sailors, they will lose their majority.