Budget Blowout Keeps US Economy Going, Until It Doesn't
Date
10/6/2023 9:10:04 PM
(MENAFN- Asia Times) NEW YORK – The US Economy added an unexpectedly large 336,000 jobs in September, buoyed by the largest peacetime budget deficit in history and a flood of transfer payments in the form of federal hand-outs to individuals.
Almost one-quarter of every dollar spent in the United States for personal consumption today comes from a federal government check. Excess payments to Americans (above the long-term trend) amounted to $15 trillion during the past four years, more than half the annual output of the US economy.
With a net foreign asset position of negative US$16 trillion and a chronic trade deficit, the United States has to borrow from or sell assets to foreigners to fund itself. This could lead to an Italy-like vice in which the cost of servicing existing debt at perpetually high yields paralyzes the federal government-potentially much sooner than Washington politicians seem to understand.
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