Well, if you thought anything was going to go back to normal after the whole COVID crisis
and those huge amounts of deficit spending and federal spending, well, it's clear now
that that's not happening.
That things are not going back to normal.
Of course, this is what always happens when there's a crisis, right?
We're told that, okay, it's the recession, it's a war.
We just need to have huge deficits, huge amounts of federal spending.
That'll get us through the crisis.
That'll solve the problem.
And then we'll go back to normal afterward.
That never happens.
People who are more observant observers of the federal government know that that
doesn't happen.
What happens is it ratchets things up to a new higher level of spending and that
becomes the new baseline from which huge amounts of new deficits and spending
levels occur.
So what's happening right now?
Well, things ain't going back to normal is what the situation is.
And so let's look.
We're now two months in to the new fiscal year.
We just had some new data come out from the Treasury and the monthly Treasury
report on spending and revenue.
And we can see what the deficits are month to month.
So let's look at the first two months combined.
And what we see is that for 2025 fiscal year, which started on October 1st,
were $624 billion in a deficit so far, one sixth of the way through the year,
comparing to 2021 fiscal year, which so that was October, November of 2021,
very much in the midst of that first year of COVID.
That was only $429 billion for that period.
And it's just been getting, there was a slight amount of retrenchment after that
in 22, 23, 24, but things have only accelerated in recent years.
So now over a half a trillion dollars in just this small amount of the new
fiscal year.
And how does that translate into a full year then if we just project out
for the full 2025 fiscal year?
It's looking like it's going to be something like 3.2, 3.5 trillion dollars for that period.
Now, how does that compare to COVID again?
So if we go back and look at the full fiscal year for 2020,
so that was that was some of late 2019, which wasn't a COVID period.
But it includes all of that March, April, May, all that acute COVID freakout period,
the lockdowns, and we're told huge amounts of spending being necessary.
That was $3.1 trillion deficit for that year.
And then it was $2.7 trillion for 2021.
Yeah, dropped back to 1.3 trillion, which was still far and beyond
anything that had been happening during the economic expansion before that.
Even Trump, who at the time I had commented on and said,
look, Trump in the 2019 fiscal year, he ran up $984 billion.
That was back in the 2019.
And I couldn't believe that.
That just seemed huge, that you would have a near trillion dollar deficit
in a year that was neither a recession nor a war.
But it turned out that that was just little.
That was that was child's play because in the next fiscal year,
which of course included a lot of Trump spending,
Trump signed off on those huge mega deficits that occurred during the first year of COVID.
That just shot up to over 3 trillion.
So now if we're looking at being on the conservative end, around $3.1 trillion,
for our current fiscal year, well, then we can just say it's worse than COVID now
in terms of deficit spending.
And that's pretty remarkable that they've managed to get to that level.
Now, you could say, oh, well, aren't things going to change before that happens?
Well, I really don't think that the Department of Government Efficiency,
DOGE, is going to reign in spending a significant amount during this fiscal year,
which of course just ends in September,
what DOGE even have time to really make a difference.
And that's assuming that they would really even be able to make a difference.
Because if you're a season observer of Washington,
you know that presidents have been sending down recommendations to Congress
for many, many years.
Congress is in charge of the budgeting process as required by the Constitution.
Yeah, they get recommendations from the executive branch,
which is what a DOGE recommendation would be.
And they pretty much throw those recommendations at the garbage
because Congress has its own constituencies.
It has its own priorities.
It's a totally different thing.
And when you start to get down into the details of federal spending,
you start to see that there's very little appetite for it, especially at the voter level.
Where are these members of Congress going to hear that they want specific cuts done?
Because when we look at poll after poll specifics on spending,
always pretty much end up with the public saying,
yeah, you should spend more.
Yes, we get these polls that say, oh, in general,
the public thinks that we should spend,
that we should cut a lot of money from the overall budget.
But then when you start to drill down and say, okay, well,
should you cut money from Social Security?
They always say no, like lopsidedly, right?
Two to one against any significant cuts.
Social Security, Medicare, even for these other poverty relief programs
that many people probably think they'll never be on.
Those are still popular.
People don't want to cut those.
Education programs, they say, if you ask, should we cut education?
Should we cut health care?
They always say no, lopsidedly against cuts.
And then if you look at military spending,
which of course is always discretionary spending for the most part,
they say no there too.
Maybe less than one third think that too much is being spent
on the military in terms of these polls.
So if Congress looks around and they look at that sort of thing,
it would be political suicide in many cases
to go back to your constituents and say, yes, well,
in order to make good on cutting federal spending,
we're going to cut Social Security.
We're going to cut defense.
There are, of course, huge amounts of government contractors
in each congressional district.
And they're not going to be in favor of that sort of thing.
And then, of course, you would be crazy to go against the elderly vote
and start cutting Medicare or Social Security.
So it's just really hard to see where these cuts are going to happen
without a major change in ideology.
That's the thing.
There's just not going to be one of these top down big cuts to spending.
And I'm not even saying they have to cut the whole deficit,
right, which of course require like $3 trillion in cuts,
which is just crazy town sort of talk.
In Washington.
But hey, maybe just $1 trillion cut.
No appetite for that from what I can see.
When will that happen?
It'll have to be after the public starts to see,
and we can discuss that in another video,
when the public starts to see the real connection
between deficit spending and higher interest rates,
the connection between deficit spending and price inflation,
the impoverishing effects of deficit spending upon the public.
The public doesn't see that yet.
They still think that it's pretty much the deficit spending
is something that their grandchildren can deal with later,
and it's no big deal for us here in the here and now.
That's a mistake.
And we're going to have to see some changes in public opinion
and ideology in terms of spending
before we can expect any significant cuts.
And until then, I think we'll just continue
to see these huge deficits.
They might increase decrease slightly to $2 trillion.
Maybe even go down to $1 trillion.
But just a few years ago, those would have been considered
huge, huge deficits.
And of course, they're just moving us ever faster
toward $40 trillion in debt.
And you have to pay interest on that.
You have to deal with that in a variety of ways
that affect the public and affect their ability
to save and pay their bills.
And there's just no sign that that's a problem politically
yet for people who are running up these huge bills.
So in the future, there'll be a change,
but I just don't think that's on the menu for 2025.