U.S. Budget Deficit Exceeds $205 Billion for November

Budget Deficit

The United States government ran at a staggering $205 billion budget deficit during the month of November, an increase of 66% when compared to the same period in 2017. Reduced tax revenue (both corporate and individual income), as well as an increase in spending were key factors in the change.

The current budget deficitt is believed by lawmakers to be unsustainable, and Congress has released a detailed list of suggestions to address the shortfall. Both income earners and business owners will want to take note, because the money is largely proposed to come from new taxes and tax adjustments.

How Congress Could Address the Budget Deficit

The Congressional Budget Office released a detailed report this week, listing options that could be used to reduce the deficit. Some potential savings and revenue streams that could be implemented over the next ten years include:

  • Add a spending cap to Medicaid, which would save between $162 billion and $703 billion.
  • Eliminate itemized deductions from tax returns, which would save $1.31 trillion.
  • Create a new value added tax for goods and services, generating up to $2.97 trillion.
  • Create a financial transaction tax, generating $777 billion.
  • Create a new tax structure for Social Security benefits to create $411 billion.
  • Reduce or eliminate tax subsidies provided for employer-based health insurance, saving up to $638 billion.
  • Cut military spending by reducing the budget for the Department of Defense. It is estimated that $517 billion would be saved in a decade.
  • Create a new greenhouse gas emission tax, generating $1.1 trillion. This could also speed the shift to renewable energy.
  • Increase tax on motor fuels including gas at the pump, generating up to $515 billion.

Suggestions from Congress are not likely to be warmly received by taxpayers. Many of the suggestions included in the detailed report would hit either American citizens or businesses in their pockets. Potential changes to pension and social security taxation will be deeply concerning for millions of Americans.

Tax Cuts and Increased Federal Spending Have Increased the Deficit

Tax cuts are one reason for the current deficit. While they have stimulated the economy and allowed for an unprecedented period of growth, they will also contribute to a $973 billion total budget deficit for this year, up from $779 billion in the previous year.

Federal spending has also increased, and the cost of Social Security is leading the way. $84 billion was spent on Social Security in November, beating Medicare and National Defense in second and third place.

The strong economy is currently softening the budget deficitt. As the economy inevitably cools, the government may need to make significant and highly unpopular changes to bring the deficit to manageable levels.

 

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The reports, research and newsletter are based on current and historical market data, as well as publicly available financial data.They are intended to be a starting point for investors. They do not provide every material fact about a company or industry, nor are they recommendations to buy or sell. The writers and the company make no warranties or representations as to the accuracy of these reports.   You should NOT rely solely upon the information or opinions read in the content. Rather, you should use the content as a starting point for doing independent research on the independent analysis and trading methods in the content. The content is impersonal and does not provide individualized advice or recommendations for any specific reader or individual portfolio. By accessing this website you have agreed to our disclaimers and privacy policy.

 

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