The U.S. deficit is about to explode

The U.S. deficit has been trending higher over the last couple of years and it is about to get a lot worse. In 2015 the deficit hit a post "recovery" low of $438 billion which is a huge sum of money, recently in 2017 it was $666 billion which is a bit ominous. The deficit is going to get a hell of a lot bigger here are a few factors that will drive the deficit going forward.

Interest rates have gone up which is a good thing if you are a saver, however if you the worlds largest debtor nation then it is a huge problem. In 2017 the U.S. paid $458.5 billion in interest, which is the most ever paid, keep in mind we are still at historically low interest rates. So far in FY 2018 we are at $62.5 billion in interest and we still have 10 months to go. https://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm

Tax cuts are coming to America thanks to Trump and the GOP, I love tax cuts however there are no spending cuts to offset the tax decrease. It is estimated the tax cuts will add $1.7 trillion to the deficit over 10 years according to the congressional budget office. I think it will add more, the CBO does not have a great record when it comes to this stuff, they tend to underestimate these things.

Spending and government continue to grow, there is no end in site to the enormity of the U.S. government.

We are due for a recession, these events usually happen every seven years or so, since the so called recovery which was propped up by printing money we are probably in for an economic slow down sooner rather than later. This will of course shrink revenues thus making the deficit even bigger. It does not help that the Federal Reserve is full of Keynesians, because when there is another recession they will do what they always do which is print more money, create more inflation and of course the government will spend more money hoping to kick start the economy.

I would not be surprised to see the deficit spike to $1 to $2 trillion over the next year or 2. Don't count on Congress doing the right thing, they will only dig this country into a bigger mess.

Here is a nice chart that summarizes the governments policy on "sound money" how they are "helping we the people"