Government budget balance

You gave credit to Scott Bessent a few minutes ago for, I guess, Operation Economic Outcast or Stronghold, whatever it's called, what's going on in Iran with the sanctions.

Um, but bring it back here to the US, and I know we wanna get into the fiscal deficit and the debt that we have and what he's trying to do in the treasury market, which seems to be not very effective, you know, m- you know, talking big and doing some operations here.

Thoughts there? Is there really anything that he can do and Do you like what he's doing?

'Cause, I mean, 'cause our, our big Cassandra moment we've been talking, we've been talking ad nauseam about is just we can't keep running 6% fiscal deficits infinitum, right? It's just, it's, it's not, it's not tenable, right? Right now it's over 100% of tax receipts is interest expense plus entitlements.

And the rubber's gotta hit the road at some point.

And so I don't know if, if, if this is in your, in your wheelhouse, or how are you thinking about things?

He kept both promises.

Within four years, twenty-eight consecutive years of budget surplus had vanished, and it never came back.

To understand why that promise mattered, you need to understand something about America that no one teaches anymore.

From 1866 to 1893, the federal government ran a budget surplus every single year, twenty-eight consecutive years.

Not a small surplus.

In the 1880s, the Treasury was pulling in roughly a hundred million dollars more than it spent annually.

bailing out aluminium smelters, spending money through the National Reconstruction Fund, bailing out copper smelters, you name it.

We're running about a 2% of GDP budget deficit at this point in the economic cycle.

It's really very fiscally irresponsible.

And we've got a lack of transparency too, Richard.

Jim Chalmers fronted the media today to announce the final federal budget figures.

As part of that, he confirmed the overall budget deficit is $6 billion lower than initially forecast, but it's still the largest deficit since COVID.

When it came to addressing higher inflation and the expected RBA rate rise tomorrow, he, I think, defaulted to his usual spin, claiming it's all because of the war and besides, everyone else around the world's got high inflation too.

Here's what he said.

Government expenditure has gone up 34%.

It's gone up a little bit over $200 billion in five years.

And the good news for Chalmers is, and he's got one thing correct, he's brought down the budget deficit, as Josh said it would be $80 billion that year, it's now going to be $30 this year.

Why would that be? He's increased revenues by 46%.