How your wallet is paying for the government’s spending binge



The Treasury Department has released the receipts for federal spending in fiscal year 2024, revealing staggering numbers. While the $1.8 trillion deficit may seem less alarming than a $2.3 trillion shortfall, the Treasury accounted for an extra $500 billion in deficits in the opening days of fiscal year 2025 to achieve that figure. Regardless, neither the Federal Reserve nor the Treasury Department can escape the impact of these numbers. We have now reached a point where permanent stagflation seems unavoidable.

The Treasury Department’s final tab for fiscal 2024 shows a $1.83 trillion deficit, setting a near record aside from the unusual pandemic years of 2020-2021. This means the government borrowed $5 billion per day — the equivalent of the FBI’s entire annual budget a generation ago. In the third quarter of this calendar year (the final quarter of fiscal 2024), the deficit equaled 6.3% of GDP, a level only surpassed during World War II and the COVID-19 pandemic.

Republicans have failed to convey to the public that the government spending they rely on comes at a painful cost.

Despite relatively low unemployment and the absence of a world war, the government took in a record $4.918 trillion in revenue but still amassed a mammoth deficit. This gap is poised to grow in the new fiscal year, meaning that when a recession officially hits, the deficit could become colossal. Although the government collected $479 billion more in revenue than last year, it increased the deficit by spending an additional $617 billion. Imagine what the deficit might look like if revenue starts to decline.

In the past, we shrugged off such news, dismissing it as mere red ink on a spreadsheet. But that was when annual interest on the debt cost only $200 billion. Now, we’re on track to spend a record $1.133 trillion — or nearly a quarter of our tax revenue — just on interest. Debt interest is now more costly than every government expense except Social Security, contributing to the crippling inflation consumers face. We’re no longer mortgaging our grandchildren’s future; we’re destroying our own.

To cover this interest, the government must sell a record number of treasury bonds each month. With countries reducing their holdings of U.S. Treasuries and buying gold instead, treasury yields are rising unnaturally. Despite a drop in the federal funds rate, rising spending and the resulting debt service push yields higher. This shift has caused gold and treasury yields to surge simultaneously — a rare occurrence, as they typically move inversely. It’s also why the 30-year fixed mortgage rate has climbed nearly a full percent since the Federal Reserve cut rates by 50 basis points. T. Rowe Price forecasts that the 10-year Treasury yield could hit 5% over the next six months, approaching levels seen in late 2007 on the eve of the Great Recession.

When yields go up, debt servicing costs increase further, and the Fed has to print even more money to cover both the rollover debt and rapidly accumulating new debt — rising faster this year than last. Under this baseline scenario, inflation is bound to worsen. The global money supply now stands at $89.7 trillion, up by $22 trillion since COVID. After shrinking in 2022-2023, M2 is now expanding rapidly and is currently 38% higher than pre-COVID levels. Consumers are already struggling with high prices, and every market indicator signals a new round of even higher costs.

Consumers have exhausted their resources ahead of an impending financial collapse, spending $2.3 trillion in excess savings over the past three years to cope with the cost of living. Currently, cumulative excess savings are negative $216 billion, with U.S. credit card debt and interest rates at record highs.

Even without the threat of hyperinflation, these economic indicators always precede a crash. The unprecedented rallies in gold and silver are clear warnings, signaling grave danger. They indicate that the Federal Reserve, in its attempts to curb recession and inflation while printing money recklessly, has lost control, leaving us to face the consequences of both.

Republicans have failed to convey to the public that the government spending they rely on comes at a painful cost. It’s not just the $103,700 in debt that each American is responsible for in some distant future. It’s the additional tens of thousands they will pay each year to maintain their parents’ standard of living for the rest of their lives — and that’s assuming things don’t get worse.

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While Americans are tightening their belts, the government is a pig feeding at the trough



With inflation rampant, it’s been an incredibly tough couple of years for Americans. Their real disposable personal income is down, their personal savings (as measured by the personal saving rate) is down, and they have record household debt.

With that reality, Americans are having to tighten their belts. Whether it is cutting back on entertainment, making substitutions in how and what they eat, or otherwise, when financial times are tight, many Americans are forced to make tough decisions and trade-offs.

The government is not doing any of that. With a real deficit of $2 trillion for the 2023 fiscal year (after an accounting adjustment), the U.S. Treasury Department recently announced that it would need to borrow $776 billion this quarter and another $816 billion next quarter to keep the government functioning.

For those who aren’t quick with the math, that’s just about a whopping $1.6 trillion in the next six months.

And, of course, the interest rates to finance that debt keep rising, making all of that funding increasingly expensive.

It doesn’t take an economist or financial analyst to know this is unsustainable. The International Monetary Fund has said America’s financial position is unsustainable. The Treasury Department and the Congressional Budget Office have said the same in recent years. The crisis is clear to just about everyone — everyone except for the people in charge.

While Americans are looking for places to cut back, the government continues to feed like a pig at a trough.

In a recent interview, investor Stanley Druckenmiller recounted that this father once told him, “If you’re in a hole, stop digging,” while criticizing reckless government spending policies. Yet the government keeps passing around the picks and shovels.

Of course, Druckenmiller is spot-on — and he is far from the only financial expert sounding alarms. U.S. government deficits hover around 8% of GDP, a crazy level at any time but more so now, given that we are in a period of economic “expansion” (that is, deficits should be shrinking as the economy grows).

The national debt is headed toward $34 trillion, which on a debt-to-GDP basis is more than 120%. The IMF has previously noted that U.S. debt becomes too much for a country to handle at around 70% to 80% of gross domestic product. If the United States didn’t have the world’s reserve currency — a status and privilege that other countries are attacking as you read this — we would likely be in a full-blown currency crisis.

Are the Fed, the Treasury, and Congress all in denial? Are they more incompetent than 10 people that you could pick at random off the street? Are they intentionally trying to destroy the U.S. economy? Or are they hoping they can patch everything together just long enough to reap as many rewards for themselves as possible and blame the next guy when it all falls apart?

It was time to get serious years ago. Now, it’s imperative. Call your representatives. Organize peaceful marches on the Fed, the Treasury, and Congress. Make this a top priority in all of your discussions. Americans have had to make sacrifices, but those in charge are making none. That needs to change immediately.

Why Biden's new ambassador to Israel is 'DEEPLY DISTURBING'



The Senate has confirmed President Biden’s nominee pick for ambassador to Israel.

Jacob Lew won in a 53-43 vote after weeks of Republican opposition.

Glenn Beck isn’t so sure he’s right for the job despite the fact that Lew himself is an orthodox Jew.

The ambassador was also the director of the Office of Management and Budget under both Clinton and Obama. He then served as Obama’s treasury secretary from 2013 to 2017.

“Apparently, Jack Lew is one of the main players in Obama’s Iran nuclear deal. He is also the main guy Obama used to sell the deal to the Jewish community,” Glenn explains, adding, “He probably quickly realized the deal backfired.”

Glenn worries there’s a chance Lew will use his “financial and negotiation skills” to “continue what Biden has been doing all along: appeasing Iran, making the perfect opportunity for government money laundering.”

Rand Paul is one of the Republicans who voted for Lew.

“Rand has been on the record kind of to approve most nominees,” Stu Burguiere explains, adding, “Right? That’s kind of been his stance over the years.”


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America's credit rating downgraded under Biden;  White House rushes to blame Republicans



The U.S. under the Biden administration has suffered a credit downgrade by one of the "Big Three" credit rating agencies.

Rather than assume any responsibility, Biden officials and other Democrats have sought to blame this embarrassing signal of decline on the Trump administration, which had managed a top rating.

The Biden downgrade

Fitch Ratings knocked the U.S. government's top credit rating from AAA down to AA+ on Monday, noting the downgrade "reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to 'AA' and 'AAA' rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions."

The agency suggested that standards of governance have dropped precipitously over the past two decades and noted that the government "lacks a medium-term fiscal framework."

Additionally, the agency indicated "there has been only limited progress in tackling medium-term challenges related to rising Social Security and Medicare costs due to an aging population."

Fitch anticipates that the general government deficit will spike to 6.3% of GDP this year from 2.7% in 2022, "reflecting cyclically weaker federal revenues, new spending initiatives and a higher interest burden."

This deficit of GDP may spike to 6.6% next year and reach nearly 7% by 2025.

The "interest-to-revenue ratio is expected to reach 10% by 2025 (compared to 2.8% for the 'AA' median and 1% for the 'AAA' median) due to the higher debt level as well as sustained higher interest rates compared with pre-pandemic levels," stated Fitch.

Extra to poor and worsening governance, rising deficits, and an alarmingly high interest-to-revenue ratio, the rating agency indicated a mild recession will hit in the fourth quarter of this year and real GDP growth will fall from 2.1% (as of 2022) o 1.2%.

The last time the U.S. had its credit rating knocked down a peg was in 2011, when Standard & Poor took away America's triple-A grade.

Aftermath

CNN reported that this rating downgrade, which came two months after President Joe Biden and the House lifted the government's $31.4 trillion debt ceiling, could drive investors to dump U.S. Treasuries, resulting in a spike in yields that "serve as references for interest rates on a variety of loans."

The Associated Press indicated that the downgrade might ultimately lead to the federal government paying higher interest rates, thereby driving up interest costs for taxpayers.

Following Fitch's announcement, the Dow plunged 348.16 points Wednesday, or 1%, the Nasdaq dropped 310 points, or 2.2%, and the S&P slipped 1.4%, reported the New York Post.

Yahoo Finance reported that Treasury yields surged and stocks slipped further Thursday morning, with the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite dropping 0.4%, 0.2%, and 0.5% respectively.

Steven Ricchiuto, U.S. chief economist at Mizuho Securities, told the Post that this downgrade "basically tells you the U.S. government’s spending is a problem. It’s an unsustainable budget situation because the economy can’t even grow its way out of this problem going forward. ... Therefore, they’re going to have to either tackle it or accept the consequences of potential further additional downgrades."

Democrats look for someone else to blame

White House press secretary Karine Jean-Pierre released a statement Monday, saying, "We strongly disagree with this decision."

Jean-Pierre rejected Fitch's conclusion, claiming, "It defies reality to downgrade the United States at a moment when President Biden has delivered the strongest recovery of any major economy."

Rather than this having something to do Biden or his administration, the press secretary claimed "extremism by Republican officials" was at fault and constituted "a continued threat to our economy."

Biden Treasury Secretary Janet Yellen stated, "I strongly disagree with Fitch Ratings' decision. The change by Fitch Ratings announced today is arbitrary and based on outdated data."

Yellen appealed to the firsthand experience of Americans to justify her claims, saying, "Fitch’s decision does not change what Americans, investors, and people all around the world already know: that Treasury securities remain the world’s preeminent safe and liquid asset, and that the American economy is fundamentally strong."

Kevin Munoz, a spokesman for the Biden campaign, tried to pin the downgrade on former President Donald Trump, going so far as to call it the "Trump downgrade," reported NBC News.

Munoz said it was "a direct result of an extreme MAGA Republican agenda defined by chaos, callousness, and recklessness that Americans continue to reject."

Contrary to Munoz's suggestion, the latest New York Times/Siena poll has Trump and Biden tied. Meanwhile, the majority of Americans appear dissatisfied with Biden's leadership, with 56% of likely voters disapproving of the job he is presently doing.

Pennsylvania Rep. Brendan F. Boyle, ranking member of the House Budget Committee, similarly sought to shunt responsibility, claiming in a statement, "Fitch's decision to downgrade rests on the shoulders of Speaker McCarthy and the extreme MAGA Republicans who openly rooted for default."

"Republican extremism and recklessness has undercut the American economy," added Boyle, suggesting Biden and Democrats "are committed to fiscal responsibility."

Sen. Chuck Schumer (D-N.Y.) claimed that the "downgrade by Fitch shows that House Republicans' reckless brinkmanship and flirting with default has negative consequences for the country."

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'We don't say a penis belongs to a man': Kindergarten teacher reportedly says he exposes kids to the terms transgender and gender-queer



The Washington Post reported that a kindergarten teacher in Massachusetts said that he exposes children to the terms transgender and gender-queer, though he does not provide complete definitions since that would be too much for kids in kindergarten. The outlet reported that the educator wished to remain anonymous since his district had not cleared him to talk publicly.

The teacher discusses anatomy but does not categorize parts as being specifically male or female, according to the Post. "We don’t say a penis belongs to a man," the teacher remarked — it goes with a human, he noted. The kindergarten educator teaches that if a physician declares a baby to be a boy when he is born, that child is not necessarily a boy. "Someone who was born a boy may not feel they are a boy."

The Post also reported that biology teacher Sam Long of Denver South High School, who is transgender, said that "LGBTQ identities are a naturally occurring facet of human variation, and that is why we need to learn about them in the context of biology and human anatomy."

Issues surrounding radical leftist gender ideology are highly controversial and remain the topic of significant debate throughout the country. Many parents do not want their kids to be exposed to the reality-defying gender-bending dogmas peddled by the left.

"There's years of research that demonstrate that curriculums that include respect for others regarding their sexual orientation and gender identity are more effective," director of the division of adolescent and school health at the Centers for Disease Control and Prevention Kathleen Ethier stated, according to the Post. "When you make a school environment safe and supportive for the most vulnerable youth, you improve the school environment for everyone."

The U.S. government has been celebrating the LGBT movement by recognizing June as so-called pride month. President Joe Biden issued a proclamation declaring "June 2022 as Lesbian, Gay, Bisexual, Transgender, Queer, and Intersex Pride Month. I call upon the people of the United States to recognize the achievements of the LGBTQI+ community, to celebrate the great diversity of the American people, and to wave their flags of pride high," he said in the proclamation.

The Marine Corps issued a tweet that included a graphic featuring bullets with brightly-colored tips, in a nod to the LGBT rainbow symbol. The Air Force also posted a tweet recognizing pride month.

Government entities, such as the Treasury Department, have even hoisted pride flags to celebrate the cause du jour.

\u201cThroughout June, the USMC takes #Pride in recognizing and honoring the contributions of our LGBTQ service members. We remain committed to fostering an environment free from discrimination, and defend the values of treating all equally, with dignity and respect.\n\n#PrideMonth #USMC\u201d
— U.S. Marines (@U.S. Marines) 1654090901
\u201cToday, @SecYellen raised the Pride flag at Treasury to express solidarity with LGBTQ+ Americans during #PrideMonth. This is the first time in history that the Pride flag has been raised at the Treasury building.\u201d
— Treasury Department (@Treasury Department) 1654196513