Debt sales will overtake levels last seen when the U.S. was climbing back from the Great Recession, Bloomberg is reporting.
And fiscal stimulus is just adding fuel to a growing economy, according to Bloomberg.
Tax cuts and spending hikes, coupled with an aging popular, are adding to a ballooning shortfall, according to Bloomberg. And it has pushed the Treasury Department to increase its long-term debt issuance at its quarterly refunding auctions from $78 billion to $83 billion.
It tops the previous record of $81 billion set in 2009 when the U.S. was fighting to come back from the Great Recession, Bloomberg noted.
However, this time borrowing is healthier because of the 3.5 percent annual growth rate and the low unemployment level.
Deputy Assistant Secretary for Federal Finance Brian Smith said Wednesday: “The Treasury market is the deepest and most liquid market in the world, and we’ve been able to finance the deficit effectively through all kinds of economic environments. I’m confident that we’ll be able to continue to issue securities and fund the government at the lowest cost to the taxpayer.”
But Bloomberg noted it could draw more attention to the federal deficit with less than a week to go before the midterms.
The Washington Post reported that President Donald Trump has ordered agencies to slash 5 percent from their proposed budgets for the coming fiscal year. The order was sparked by a 17 percent increase in the federal budget deficit for fiscal 2018.
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