Tag: debt

Chancellor set to cut welfare spending by billions

The chancellor has earmarked several billion pounds in draft spending cuts to welfare and other government departments ahead of the Spring Statement.

The Treasury will put the proposed cuts to the government’s official forecaster, the Office for Budget Responsibility (OBR), on Wednesday amid expectations the chancellor’s financial buffer has been wiped out.

Sources said “the world has changed” since Rachel Reeves’s Budget last October, when the OBR indicated she had £9.9bn available to spend against her self-imposed borrowing rules.

The OBR’s forecast is likely to see that disappear because of global factors such as trade tariffs, as well as higher inflation and borrowing costs in the UK.

The Treasury will on Wednesday inform the OBR of its “major measures” -essentially changes to tax and spending in order to meet the chancellor’s self-imposed rules on borrowing money.

The government has committed to get debt falling as a share of the economy during the course of this Parliament, and to only borrow to fund investment, not to cover day-to-day spending.

Such rules, put in place by most governments in wealthy nations, are designed to maintain credibility with financial markets. Reeves has repeatedly said her rules are “non-negotiable”.

The spending cuts drafted by the Treasury will help plug the gap that has emerged in recent months, ahead of the OBR publishing its forecast and Reeves giving a statement on 26 March.

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United States Senate Fails First Test on Balancing the Budget

Congress hates ideas to cut spending. Whether we are talking about Republicans or Democrats, they seem to be incapable of taking any concrete action to lead on the idea of balancing the budget and paying down America’s approximate $36 trillion in debt. Our national debt is emerging as the greatest threat to national security, yet Congress refuses to follow the lead of the Department of Government Efficiency (DOGE), run by Elon Musk, to make reforms to government spending programs. The fact that the Senate has rejected ideas to use the budget process to cut spending is a bad sign going forward.

The Trump Administration has been aggressive in finding places to cut spending through executive action. This continues the idea of “Promises Made, Promises Kept” that has been a mantra of the Trump Administration since his first term in office. One promise was to find ways to shrink government where it made sense. The executive branch of government has taken the lead on weeding out waste, fraud and abuse, yet Congress seems to want to increase spending on programs they want to empower, yet they steadfastly refuse to pay for new spending with the spending cuts proposed by President Trump and Members of Congress who have proposed reforms to government programs.

The evidence of a lack of will on the part of the Senate to cut any spending was clear recently when my former boss, Sen. Rand Paul (R-KY), offered an amendment to the Senate budget resolution on February 20, 2025 to cut federal spending by at least $1.5 trillion mirroring his “Six Penny Plan.” The Paull amendment sets up a process to balance the federal budget in five years by cutting spending 6% per year by creating a new budget function that freezes in programs spending, in addition to calling on Congress to find a 6% cut every year for five years. The Paul idea preserves Congressional discretion on how to achieve the reductions.

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Thanks To Massive Deficits, U.S. Will Pay $13.8 Trillion In Interest Over The Next Decade

The Friday before Inauguration Day, the Congressional Budget Office (CBO) illustrated the fiscal challenge facing President Trump and the new Republican Congress. In a short version of its annual Budget and Economic Outlook, CBO quantified the whopping $21.8 trillion in budget deficits the federal government faces in the coming decade.

While the updated numbers only marginally constitute news — CBO has warned for years about our dire financial future, only for lawmakers to keep spending — one particular nugget illustrates the problem. The budget gnomes significantly increased their spending projections for Medicaid, as but one example of how entitlement programs continue to cannibalize the federal budget.

Double-Digit Growth in Medicaid

Appendix A, which contains all the changes — legislative, economic, and technical — to the fiscal baseline since CBO’s last update last June, contains a sizable change in the last category. Among the technical “tweaks,” the budget office increased projected federal spending on Medicaid over the coming decade by $817 billion, or 12 percent. Most of this projected increase has to do in one way or another with administrative actions by the Biden administration.

Chief among the factors driving the spending explosion were continued increases in Medicaid enrollment, even after states were finally permitted to remove beneficiaries from the rolls following the pandemic (something they could not do during the Covid “emergency”). CBO increased projected enrollment for calendar year 2025 from 79 million last June to 84 million. It also noted that the enrollees remaining on Medicaid have generally worse health than those who were removed from the rolls, resulting in “significantly higher than expected” costs per enrollee last year — which CBO believes will force state Medicaid programs to raise their rates to the managed care plans that provide coverage.

Other factors also drove the growth in the Medicaid spending estimates, including projected increases in enrollment among individuals with disabilities — a result of Biden’s rules expanding eligibility for the Supplemental Security Income program — and rising drug costs, attributable in part to Biden’s recent proposal to require Medicaid programs to cover GLP-1 drugs to control obesity. CBO assumed a “modest increase in expected coverage expansions” under Obamacare, meaning more red states will decide to cover able-bodied adults (which they should not do).

Finally, the budget office assumed that another Biden regulation will raise Medicaid spending. Specifically, a rule on state-directed payments will encourage states to raise reimbursement levels to draw additional federal matching funds. In a recent paper for the Paragon Health Institute, I suggested that Congress or the new administration should repeal many of these requirements, which provide examples of the executive branch spending money without congressional approval.

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Another Biden Time Bomb Just Blew Up

Former presidentish Joe Biden shuffled off into the sunset almost exactly 22 days ago, but his demented legacy of radical overspending, over-borrowing, and overregulating lives on — and the latest Treasury figures are one more glaring example of how deep the hole is the Biden Cabal dug for us.

Look, I know these spending stories might seem dry and boring, and I feel like I lose readers every time I get into one of them — but this is real End of the Republic stuff, as Donald Trump, Elon Musk, and the DOGE boys seem to understand. So bear with me once more as we stare into the abyss and hope that it is not gazing into us.

“The train is out of control,” Geiger Capital warned on X on Monday. “The first four months of FY 2025 produced a deficit of $838 billion. That’s $306 billion more than the deficit recorded in the same period last fiscal year.” 

Keep your flashlight on me as I walk you through the tall weeds.

The year-over-year deficit increased by more than a third in the last quarter of Bidenomics, and yet revenues only increased by less than 1%. Washington is spending a whole lot of money we don’t have to almost zero effect, like transfusing fresh blood into a corpse. 

This is the Biden economy that the press assured us was all hunky-dory in their attempt to push Kamala Harris over the finish line.

“We’re running a $2.5 TRILLION annual deficit” for 2025, Geiger concluded. 

The economy’s official growth rate last year was 2.8%. That’s an extra $815 billion in a $29.1 trillion economy. But the federal deficit last year — the money Washington conjured up out of nothing to pay for s*** we didn’t need — was $1.8 trillion. What that means is that our 2.8% growth was an illusion, a Washington accounting gimmick financed by our grandkids and great-grandkids. 

The weeds are looking like redwoods right now, I know, but stay with me.

If Washington had done nothing more radical last year than spend within our means, the economy would have shrunk by about $1 trillion. That’s a nasty recession where the economy ended the year almost 3.5% smaller than it began. 

So where’d all that funny money go?

Would you believe… right back to the government?

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‘Worse Than World War II’ – Visualizing US National Debt (As A Percent Of GDP) Since 1900

This year, U.S. national debt is set to approach 100% of GDP, up from 36% in 2005.

By 2035, the tab is projected to reach 118.5% of GDP as higher debt costs steepen the deficit, fueling further government borrowing. Today, the deficit stands at $1.9 trillion with net interest and mandatory spending outpacing revenues.

This graphic, via Visual Capitalist’s Dorothy Neufeld, shows U.S. federal debt projections to 2035, based on data from the Congressional Budget Office.

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How is Stargate’s $500B getting funded?

OpenAI, SoftBank, Oracle, and the UAE’s MGX on unveiled a company on Tuesday that plans to invest $500 billion in AI infrastructure for OpenAI in the U.S.

Why it matters: SoftBank is doubling down on its OpenAI bet, and it reduces OpenAI’s reliance on the infrastructure of Microsoft, its largest investor.

Context: The Stargate project will invest an initial $100 billion, with another $400 billion over the next four years.

Between the lines: A portion of the $100 billion is expected to be funded via third-party debt rather than equity, Axios has learned.

  • SoftBank will be responsible for raising the debt.
  • SoftBank and OpenAI are the largest equity investors in the first $100 billion in stargate yes, with Oracle and MGX also having contributed.
  • Similarly, the additional $400 billion is expected to be a mix of current investors, new investors, and debt providers.

OpenAI will be responsible for the day-to-day operations of the business.

The big picture: SoftBank CEO Masayoshi Son previously promised President Donald Trump that he would invest $100 billion in U.S. firms over the next four years. This is part of that promise.

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Our 101 Trillion Dollar Problem: This Is The Number One Tool The Elite Use To Enslave Us

Right now, a tremendous awakening is happening as people all over the world become educated about the tools that the elite use to enslave us to their system.  The number one tool that they use to enslave us is debt.  The financial powers of the world use it to enslave individuals, corporations and governments.  For thousands of years humanity has been taught the proverb that “the borrower is the servant of the lender”, and yet today billions of people around the globe have willingly made themselves servants of the money powers.  You see, when you borrow money from a financial institution, you not only have to pay that money back, but you also have to pay a significant amount of interest.  In fact, often the interest ends up being much more than the principal of the loan.  Thus the borrower ends up devoting a great deal of his or her labor to earning money for the lender.  Yes, there are times when it is necessary to borrow money.  But what we have been doing over the last 30 years goes far beyond “necessary” borrowing.  The fact that the U.S. government is now 36 trillion dollars in debt gets a lot of attention, but the truth is that state and local governments, corporations, and U.S. households have piled up enormous mountains of debt as well.

I want to show you a chart from the Federal Reserve that is hard to believe.

In the mid-90s, the total amount of debt in the system was about 20 trillion dollars, but now we have reached the 101 trillion dollar mark…

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Unless Something Changes, 4 Years From Now We Will Be 51 Trillion Dollars In Debt

The U.S. government is currently constructing the most colossal monument in the history of the world.  It is a monument of debt, and we will forever be remembered as the nation that piled up far more debt than anyone else ever did.  For decades, this generation has been recklessly spending the money of future generations of Americans.  Most people seem to think that we are totally getting away with this swindle, but the truth is that the party is almost over.  Our national debt has already surpassed the 36 trillion dollar mark, and according to usdebtclock.org at our current rate of spending our national debt will surpass the 51 trillion dollar mark four years from now.

We are a spoiled, bloated, greedy nation that has run up a debt so big that words simply do not do it justice.

We have got to stop spending so much money, but we just can’t help ourselves.

In January, Donald Trump will be faced with some very difficult decisions regarding our debt as soon as he is inaugurated…

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US Credit Card Defaults Soar To Crisis Highs As Inflation Storm Crushes Working-Poor

The party is long over for the bottom third of US consumers, as maxed-out credit cards and depleted personal savings have pushed credit card loan defaults to their highest level since the 2008 financial crisis.

Financial Times cited new data from BankRegData revealing that credit card companies wrote off $46 billion in “seriously delinquent loan” balances in the first nine months of the year—an alarming 50% increase from the same period last year and the highest level in 14 years.

US credit debt recently surpassed $1 trillion and continues to expand rapidly. Making matters worse, annual percentage rates (APRs) on credit card debt have hit record highs, compounding the financial misery for cash-strapped consumers in the era of failed ‘Bidenomics’. 

Despite the interest rate cut, the average APR on credit card debt reached a new record at the end of the third quarter. 

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Understanding The ‘Raising The Debt Limit’ Scam

Last week President Trump tweeted, “I requested that Mitch M & Paul R tie the Debt Ceiling legislation into the popular V.A. Bill for easy approval. They didn’t…Could have been so easy-now a mess!”

Trump seemed awfully cavalier about raising the debt limit, didn’t he? Isn’t raising the debt limit a really big deal? Isn’t it capitulation by all conservative-minded Americans? Isn’t raising the debt limit tacit approval for the US Government to even further exceed its Constitutional boundaries? Well, maybe. But more importantly, the ‘raising the debt limit’ debate is just another scam on the American people, perpetrated by those we elected to represent us in DC, another reason they all must be replaced. 

The periodic raising of the so-called “debt limit” is simply the natural order of things anytime a national government chooses to carry out its financial responsibilities under a private banking system rather than a truly sovereign, national monetary system. The banking system in our case is that of the Federal Reserve.
Although it could if it chose, the US Government does not create and issue dollars…AKA, money. Instead private Fed member banks do, the largest of which are on Wall Street. Importantly, however, those banks only issue dollars when someone promises to pay them back, with interest. And because the banks do not issue the dollars to pay the interest, the only way for a society as a whole to pay back what has already been borrowed is to keep borrowing more and more, and pay off older loans with new, larger loans. The entire American economy ($68 trillion in debt), including the US Government ($20 trillion in debt) is testimony to that fact. There is no mathematical solution for this system. It cannot be paid off from within. And while the system runs, the bankers get richer and richer, the population gets poorer and poorer, and the Government goes more and more in debt. It is a covert, wealth transfer mechanism-the biggest scam in the history of mankind. And as long as the Federal Reserve System stays in operation, it will remain mathematically impossible for America to become a nation other than one that is increasingly encumbered in debt.

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