Economists sounded surprised recently when inflation remained above expectations for the third straight month, likely keeping interest rates elevated for the foreseeable future. If they looked in Washington’s direction, they shouldn’t be.
Two reports from the Congressional Budget Office (CBO) explain the dilemma our economy faces. In the short term, significant and persistent deficits caused by Washington’s spending keep fueling the inflationary fire. In the longer term, the debt accumulated by all those deficits will make our economy stagnant for future generations.
Trillion-Dollar Deficit
The first CBO report examined the federal government’s financial accounts halfway into the fiscal year. Six months into the budget cycle that ends this Sept. 30, Washington has already racked up a deficit of over $1 trillion.
Granted, the federal government will likely…
