55 cents of every dollar spent in August was borrowed, further inflating the $2 trillion deficit. If a recession hits, this borrowing could spiral out of control.

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In August, the US government hit a grim milestone—55 cents of every dollar spent was borrowed, pushing the budget deficit to an alarming $1.9 trillion with just one month left in the fiscal year. The situation is dire, as interest on US debt has surpassed $1 trillion for the first time ever, exacerbating an already out-of-control deficit. August alone saw a staggering $380 billion shortfall, a 66% increase from last year and a devastating 50% jump from July.

This budget explosion comes at a time when the economy is still expanding, with home and stock prices at record highs. What happens when a recession hits? If the government is borrowing at such levels now, the deficit will spiral even further out of control during a downturn.

Despite hopes that 2024 would be the year for fiscal recovery, the deficit sprinted ahead, leaving both Democrats and Republicans unwilling to make the necessary cuts to rein in spending. Neither party is poised to tackle the root of the problem, ensuring that whoever takes office next will bear the blame for what’s shaping up to be a monumental economic collapse.

The reality is stark: the US government’s runaway spending, fueled by ballooning interest charges, is pushing the country toward an inevitable fiscal reckoning. Time is running out, and the question remains—how much longer can this unsustainable path continue before it all comes crashing down?

55 cents out of every dollar the federal gov't spent in Aug was borrowed…
…we're in trouble. pic.twitter.com/K9178rK30B

— E.J. Antoni, Ph.D. (@RealEJAntoni) September 12, 2024