Well, that was timely. The US Treasury just posted a record $207 billion deficit for May and record monthly spending of $440 billion. That brought the rolling 12 month deficit to just shy of the trillion dollar mark at $986 billion.
The timely part is two-old. First, it just so happens that May marked month #119 of the current expansion, making it tied for the duration record with the 1990s cycle. But even JM Keynes himself would be rolling in his grave in light of the chart below.
To wit, even by the lights of hardcore Keynesians of yore, fiscal deficits were supposed to be falling sharply at the end of a business cycle or even moving into surplus as they did in 1999-2000, not erupting toward 5% of GDP as has now happened.
The second timely note, of sorts, is that the Wall Street Journal was Johnny on the Spot this AM with a front page story entitled, “How Washington Learned to Love Debt and Deficits”.
The story’s quote from the current Dem Chairman of the House Budget Committee, John Yarmouth, says it all. There simply has never been such bipartisan complacency about the nation’s public finances in all of modern history – including during the biggest borrow and spend days of FDR, LBJ and every president since Gerald Ford:
Rep. John Yarmuth (D., Ky.), House Budget Committee chairman, says he rarely hears from constituents concerned about rising deficits and debt. Many voters’ attitudes, he says: “There haven’t been any cataclysmic consequences, so why worry about it?”
Click for Full Text!