The Office of Management and Budget estimates that the deficit will rise to 1.085 Trillion during fiscal 2019. This will be the highest deficit since 2012. In both 2011 and 2012, the deficit was slightly higher than 1.2 Trillion.
Over the past 12 months, Federal Revenues have increased 0.5% while outlays increased 3.8%
The fastest growing outlay categories are interest expense up 28% and national defense up 8.1%
Inflation which caused unnecessary concern to the market in early Feb, seems to be under control.The Fed's favorite price gauge of inflation is the Core (omits food and energy) "Personal Consumer Expenditure" (PCE). The Fed defines price stability as 2% Core PCE inflation which has not been reached in the last 10 years.
The Core PCE for Oct, reported at the end of Nov, dropped to 1.78%, and the 6 month rate, annualized, dropped to 1.53%
Even at just 2% inflation over 100 years (a human lifetime), the value of one dollar goes to 13.8 cents. This is one of the ways governments copes with debt. It gets paid back in dollars of lesser value.
