On a collision course with fiscal reality!
We’ve taken the title of today’s commentary, Somethings Got to Give!, from David Stockman’s recent newsletter.
Stockman, director of the US budget under President Reagan, concludes that “Washington is asking for a thundering collision.”
We couldn’t agree more. Most of the letter is about the Biden team depleting the nation’s strategic petroleum reserve in a naked vote-buying scheme. Citing Bloomberg News, Stockman points out that it only took the Biden administration six months to drain the US oil supply down to a 40-year low. It will take decades to refill it.
But Stockman is only warming up with his discussion of the strategic petroleum reserve. Here is his treatment of Biden’s spending calamity:
During the past 12 months the U.S. government spent $6.7 trillion. That’s up 14% on a year-over-year basis. And while that’s still below the insane $7.6 trillion peak at the height of the stimmy bacchanalia in the spring of 2021, it’s still 43% above the pre-Covid level of Federal outlays of $4.8 trillion recorded in 2019.
Likewise, for fiscal year 2023 to date the U.S. federal deficit is up a staggering $900 billion to nearly $1.4 trillion. That’s because YTD revenues are down $422 billion while outlays are higher by $455 billion.
You can’t make this up. The one-time capital gains tax windfall harvested in FY 2022 is long gone, but they are still spending like drunken sailors. During the first nine months of FY 2023 receipts of $3.4 trillion covered only 71% of outlays at $4.8 trillion.
Meanwhile, Treasury Secretary Janet Yellen has been running around the world again. Uh oh! In India, Yellen talked about using US taxpayer resources – laundered of course through institutions the US funds like the World Bank and the IMF – to do something about the trouble foreign debtors are in. Wait a minute! The US cannot pay its own debts and she’s acting like Rockefeller tossing dimes to children and finding ways to funnel good money after bad?
Yellen is not too good on her best days, but this is crazy. Maybe there is something to that story about Yellen dining on psychedelic mushrooms in China. Then there is the Vice President, Kamala Harris. Among her other recent word salads, the VP artfully explained the other day that A.I. is two letters that stand for “artificial intelligence.” And as for the President himself, he took a break from stumbling on the stairs of Air Force One to talk about his plan to build a railroad “across” the Indian Ocean.
We don’t want to be victimized by a monetary system that is on the ropes thanks to that kind of leadership. We prefer gold and silver, because as Stockman said, “Something’s got to give!”