Category Out of control spending

Aug 1 2024

$2.4 Billion Daily – Servicing the US National Debt


Posted orriginally on Aug 1, 2024 By Martin Armstrong 

FedGovtDebtInterestPayments

Serving debt is the largest cost of Washington’s debt crisis; America currently spends $2.4 billion in daily interest fees alone. The debt and spending simply cannot keep up with what America is bringing in. The federal govt spent $658 billion on interest fees in 2023, a 38% jump from the $476 billion in servicing debt in 2022. That’s 2.4% of the entire national GDP spent on interest expenditures alone.

The Congressional Budget Office believes the US defense expenditures will reach $870 billion this year to put into perspective how wasteful these interest payments have become. The CBO also believes interest costs will spike to $892 billion by year-end, rising to $12.9 trillion by 2034. The previous high came in during 1996 at $468 billion.

“Interest is projected this year to be the second-largest federal program — it means your tax dollars are going to interest instead of going to everything else,” said Marc Goldwein, senior policy director at the Committee for a Responsible Federal Budget, a bipartisan think tank. So these offices believe the US will accumulate, because they won’t try to pay it off, a 20.3% in federal revenue costs for this debt by 2025.

The Peter G. Peterson Foundation broke the projected cost post 2032 to be $38,600 per American citizen. Not only is the US unable to pay this debt but those in government continue to spend TRILLIONS of dollars on programs that have not benefitted the people. This is one of the reasons that the US government is looking at a complete overhaul by the time we reach 2032 for it can not leave it for the next generation without consequences.

Jun 2 2023

Senate Passes Debt Ceiling on Schedule


Armstrong Economics Blog/Sovereign Debt Crisis Re-Posted Jun 1, 2023 by Martin Armstrong

COMMENT: Marty, the Senate passed the Debt Ceiling. It is amazing how Socrates shows there was no debt crisis. As you wrote “When we look at the Array, we do not see a crisis with the debt ceiling.”  I do not know how it does this, but what you have created is truly a gift to humankind.

CLB

REPLY: I never expected that linking everything together would predict wars, civil unrest, or financial crises. There is a lot we can learn from Socrates.

Jun 1 2023

Debt Ceiling & War Crisis


Armstrong Economics Blog/Bonds Re-Posted May 31, 2023 by Martin Armstrong

When we look at our Computer’s timing arrays for the 30-year bond, it did show a target last week with a Directional Change. So far the market has held that low and has been consolidating. When we look at the Array, we do not see a crisis with the debt ceiling. However, the next Fed Meeting is July 25-26 and when we look at our Array, we see that is when there is a Panic Cycle.

There is NOBODY in Washington who is ever interested in actually paying off the debt. Even AOC has come out and said there should be no debt ceiling – just print until the cows come home, but that may be a problem when Bill Gates and the WEF want to kill all the cows.

In that regard, we are only making things chaotic. The government should just print the money and not borrow in the first place for they are competing with the private sector which is the ONLY real creator of worthwhile jobs.

Meanwhile, the Neocons are hoping to start a war with massive air drills in Europe going to even Church, which they do not believe in God, and lighting candles just in case he does exist to please make Russia attack. If not, hell, they will just say Russia attacked as they lied and claimed that Vietnam attacked us and Iraq had weapons of mass destruction. War is on the horizon and that is the MOST inflationary influence of all.

May 31 2023

Byron Donalds and Chip Roy Are Furious About McCarthy Debt Ceiling Deal – House Freedom Caucus Says “NO”!


Posted originally on the CTH on May 30, 2023 | Sundance 

As details begin to emerge, many of the House Republicans are furious at Kevin McCarthy for the deal to lift the debt ceiling he has brokered with Joe Biden.

Suddenly, the prior battle and construct of the House Rules Committee is becoming important.   While Kevin McCarthy may have the 218 votes on the floor of the House to pass the deal, he first has to get it out of the House Rules Committee (HRC).  If three Republicans oppose it in the HRC, McCarthy cannot get it to the floor.  Chip Roy and Ralph Norman are on the HRC and oppose the bill.   Thomas Massie is also on the HRC but appears to be supporting Kevin McCarthy (lol, because muh principles).

https://youtube.com/watch?v=BMxbCiQNXIs%3Ffeature%3Doembed

Byron Donalds also delivered a strong rebuke of the McCarthy deal, as outlined below:

https://youtube.com/watch?v=S8OJycSQM_E%3Ffeature%3Doembed

WASHINGTON DC – […] The powerful House Rules Committee will spend Tuesday afternoon debating and — ultimately working to pass — the bipartisan debt deal, requiring a simple majority of at least seven votes on the panel to come to the floor. But some conservatives, including Rep. Chip Roy (R-Texas), a committee member, have signaled they may use their power on that panel to block the debt plan from receiving a full House vote.

“I’m going to do what’s in the best interest and this bill is not in the best interest of the country. That is why Democrats are voting for it,” said Rep. Ralph Norman (R-S.C.), another conservative who sits on the Rules panel and has suggested he will oppose the bill during the panel’s meeting.

[…] Under the panel’s current makeup, Rules Chair Tom Cole (R-Okla.) can lose two GOP votes — along with all four Democratic votes — and still advance the bill.

Senior Republicans believe that’s exactly what’s going to happen, according to three people familiar with the discussions. Norman and Roy haven’t explicitly said they will oppose, though Massie is expected to vote in support of the measure going to the floor.

GOP Whip Tom Emmer (R-Minn.) said that he is “confident” that the bill will hit the floor on Wednesday, noting that Rules would be considering amendments. Members submitted more than 55 amendments to the debt deal, most of them from Republicans but some from Democrats as well. (read more)

Rep Dan Bishop: The bill is bad

May 29 2023

Sunday Talks, Kevin McCarthy Makes His Case for the Debt Ceiling Bill


Posted originally on the CTH house in May 28, 2023 | Sundance 

House Speaker Kevin McCarthy appears on Fox News Sunday to defend his deal with Joe Biden for a debt ceiling increase.

In the past 24 hours many fiscal conservatives have criticized McCarthy for the terms of the agreement. In this interview, McCarthy walks through the details of the terms as he constructed them and pushes back against some of the criticism.  WATCH:

https://youtube.com/watch?v=mM7IpA49-MI%3Ffeature%3Doembed

As soon as the bill is in written form, we will be able to make a better determination.  At this moment this is all hearsay based on what people think the legislation says.

May 28 2023

McCarthy and Biden Strike Spending Deal to Raise Debt Ceiling


Posted originally on the CTH on May 27, 2023 | Sundance 

According to House Speaker Kevin McCarthy, a deal “in principle” has been reached between himself and Joe Biden.  McCarthy held a brief press conference to announced the deal; however, no details are forthcoming.  WATCH:

https://youtube.com/watch?v=-axQXLdfeOM%3Ffeature%3Doembed

WASHINGTON DC – … [B]oth Biden and Speaker Kevin McCarthy still have to sell their respective parties on the agreement, navigating fraught votes in both chambers. McCarthy immediately hosted a call with members after the deal was announced, calling it a “big win” and claiming Democrats didn’t get “one thing” that they wanted out of the negotiations on a member-wide conference call, according to three people on the call.

While conservative Rep. Bob Good (R-Va.) vocally criticized the agreement — saying he was “extremely disappointed” that the deal didn’t include “any meaningful cuts” — other Freedom Caucus members praised the deal, including Reps. Jim Jordan (R-Ohio) and Warren Davidson (R-Ohio). Though both said they wanted to see the text, Jordan praised McCarthy for a deal where the government is “spending less” than it did before and getting Democrats to move on work requirements.

“Seems like a pretty darn good deal to me,” Jordan said, according to one of the people on the call.

And the speaker forcefully defended the agreement after Good’s criticism, saying it could pass the Senate and that he never claimed the legislation the House passed last month would be the “end all bill.”

McCarthy concluded the call around 10:30 p.m., telling his conference that he needed to speak to the White House again and make sure the text reflected their agreement on principle. “Let’s stick together,” he said while concluding the call. Biden and McCarthy will talk again Sunday, the speaker had told reporters earlier.

In addition to lifting the $31.4 trillion borrowing cap through the 2024 presidential election, the deal in principle would keep non-defense spending roughly flat for the fiscal year that begins Oct. 1, according to a person familiar with the negotiations, falling far short of the $130 billion in cuts at fiscal 2022 levels that Republicans had originally demanded.

Non-defense spending would increase by 1 percent in 2025, followed by years of non-enforceable funding targets, according to the person familiar. Republicans had initially pushed for a decade of strict funding limits. Defense spending would be set at the level proposed in Biden’s budget for the coming fiscal year, representing a modest 3.5 percent increase over current funding levels — less than what many Republican defense hawks would’ve liked to see for the Pentagon in order to keep pace with inflation. (read more)

May 25 2023

Audit Reveals Pentagon Lost Thousands of F-35 Jet Parts


Armstrong Economics Blog/War Re-Posted May 25, 2023 by Martin Armstrong

The Lightning II or F-35 is one of the most sophisticated fighter jets available. Created by Lockheed Martin, the jet is designed for stealth and destruction. This elite weapon is the most expensive plane ever built, with an estimated lifetime cost between $1.4 and $1.6 trillion. The United States owns more of these jets than any other nation, but a recent report reveals that the Department of Defense is missing thousands of F-35 parts.

Although the F-35 costs around $80 million, the operation costs are very high, with an average flight costing $36,000 per hour. Lockheed Martin has claimed that it could reduce flight costs to $25,000 per hour if the Pentagon awards them a lucrative maintenance contract. The Government Accountability Office (GAO) issued a report in 2019 stating that the F-35 had a major shortage of spare parts. “F-35 aircraft performance is falling short of warfighter requirements—that is, aircraft cannot perform as many missions or fly as often as required. This lower-than-desired aircraft performance is due largely to F-35 spare parts shortages and difficulty in managing and moving parts around the world,” the reported noted.

The problem of managing moving parts globally was never solved. In fact, the GAO released a new report stating that thousands of spare parts are missing, “the total value of which is unknown.” The Pentagon never kept a record of its most prized aircraft, which are held in over 50 locations globally. The Pentagon’s F-35 program office spent $12 million to conduct the inventory, discovering they were “unable to provide the cost, total quantity, and locations of spare parts in the global spares pool.” The GAO is condemning the Pentagon for its “lack of accountability” and said this massive error highlights why the Defense Department needs to conduct a full audit of all its inventory.

The Pentagon handed over the power of record-keeping to the manufacturer, Lockheed Martin. Lockheed Martin seemingly does not know where the parts are either, but they’d happily supply the US with more. The nation is trying to cut funding everywhere but has lost at least millions from this mismanagement. One must wonder if only the bill, but not the parts, existed. The US did gift Ukraine an F-35 and positioned numerous F-35 jets in strategic NATO member locations on the eastern front. Lockheed Martin believes that over 400 F-35 aircrafts will be stationed in Europe by 2030. The defense contractor is planning for a major war, while the US government is ill-prepared and cannot account for its own weapons.

May 25 2023

The Debt Ceiling = Pi $31.4 Trillion


Armstrong Economics Blog/Sovereign Debt Crisis Re-Posted May 24, 2023 by Martin Armstrong

COMMENT: Hello Martin,
The debt ceiling is pi!! = 31.4 trillion $
Coincidence? 😜
Best regards from Vienna and thanks for what you are doing.
Ralf

REPLY:  Yes, very interesting. This is no doubt the major turning point on debt and this is on a global scale. It is not the collapse of the debt just yet nor the dollar.

May 25 2023

The GOP’s Debt Ceiling Demands


Armstrong Economics Blog/Politics Re-Posted May 24, 2023 by Martin Armstrong

The Republicans and Democrats are refusing to agree on the debt ceiling crisis. The government will be unable to pay its bills and the US will default if an agreement is not reached. Yellen has reached out to every media outlet and large corporation in the US to warn of the “catastrophic” consequences. Of course, they’ve always managed to increase the limit in the past as America cannot afford to default on its debt obligations. The Democrats insist on spending with no end in sight, while the Republicans are demanding some sort of budget. Biden and McCarthy met on Monday to discuss, but neither side will budge.

Biden said the GOP is taking an “extreme position,” but what are they demanding? The GOP wants to set discretionary federal spending at $1.47 trillion for the next fiscal year, with an increase of only 1% in future years. The Congressional Budget Office (CBO) said this would reduce the deficit by $4.8 trillion in the next decade.

The promise Biden made to students must be repealed for the Republicans to accept the ceiling. Biden implemented this policy to buy young votes and had no fiscal plan in place to finance such a lofty goal. The GOP believes student loan payments are being unfairly subsidized by millions of American taxpayers, many who already paid off their own student debt. Biden’s plan also does nothing to address continually rising tuition costs. The CBO believes this cut will save taxpayers about $460 billion over the next decade.

Biden’s IRS Army must also be defunded. The GOP wants to rescind the $71 billion that the Biden Administration used to hire 87,000 new IRS agents. We never had a need for so many agents in the past, and it is unlikely that they will shakedown $71 billion from average American families.

The Republicans also want to take back unobligated COVID relief money. Six separate bills were passed between 2020 and 2022 and the government is still shelling out money for a pandemic that has ended. The CBO stated this would save the US $30 billion in spending over the next 10 years.

The climate change agenda is costly. Republicans are demanding that Biden eliminate some of the tax breaks his administration provides to green-friendly companies. They’re negotiating exactly how to position some of the perks for biofuel. In general, the CBO believes this will save the US $570 billion over the next 10 years.

Increasing America’s ability to become energy dependent is crucial. Biden ripped away America’s ability to function without energy exports on his first day in office. The country needs coal, natural gas, and oil to function and energy inflation remains a serious problem. The energy bill, labeled HR1 as it is of top importance, would also boost production of lithium, cobalt, nickel, and other minerals.

The Republicans would also like to limit social programs and government handouts. Able-bodied adults under the age of 50, without dependents, must work a minimum of 20 hours a week or they may lose their SNAP and food stamp benefits. Those who are unemployed but on Medicaid and able-bodied will also be required to work a part-time job. The CBO stated 15 million Medicaid recipients would be required to work part-time, and 1.5 million could risk losing federal funding.

Unsurprising since the neocons are on both sides, no one has asked Biden to end the blank checks to Ukraine. America has sent hundreds of millions to Ukraine and is receiving nothing in return. Our own border is overrun and yet we just pledged another $300 million of American taxpayers’ money to secure Ukraine’s border. The funding for this war will create unprecedented inflation and cripple our economy.

May 22 2023

Project Veritas Exposes NYC Migrant Crisis


Armstrong Economics Blog/Corruption Re-Posted May 21, 2023 by Martin Armstrong