EconAir

  PRELIMINARY SUMMARY OF FISCAL 2024 BUDGET The deficit in fiscal 2024 was around $1.8 trillion, about $5.0 trillion in revenue and $6.8 trillion in expenses. Interest on the national debt this year is around $960 billion, over twice the interest on the fiscal 2021 budget. Interest expense this year passed outlays for the military. Leaving aside Social Security and Medicare, interest expense is about 20% of total budget outlays. Interest expense is about half the budget deficit.   The fiscal 2024 deficit was 6.4% of GDP.  SOME BASIC DEFINITIONS AND A LITTLE DETAIL Some basic definitions for people in government suffering from political amnesia:   Deficit.    The difference between the federal government’s spending and its revenue in one fiscal year.  The fiscal year starts on October 1.  So fiscal year 2024 started on October 1, 2023. You know right away this is going to be confusing. Debt .  Short for national debt or ...

Janet in Wonderland Anyone who believes that financial markets are rational is not looking at the current government bond markets.    The U.S. 10-year government bond is paying around 2.5%.    Believe it or not, the 10-year Spanish government bond is paying less.   The German 10-year government bond is paying a little over 1%, less than a 2-year U.S. bond. If you were not a finance major, skip this paragraph.   The yield curve is incredibly flat.   It is only this way because the Fed hasn’t realized yet the Great Recession has been over for five years.   More sinister explanations rely on conspiracy theories.   When given the choice, I always go with stupidity. According to CNBC (yes, I’m still addicted to my financial soap opera), the interest rates on German and Spanish 10-year bonds are at a 200-year low.   I don’t know how they know that.   Germany didn’t exist 200 years ago but Prussian war bonds probably did. ...