5.3% is very much still in line as a fairly ordinary deficit compared to many other countries in the world. A little towards the higher end, but not out of the ordinary by any means. The 2027 projection is a fair cause for concern, but the point of this report is explicitly to make sure the American budget doesn’t head that way. To quote:
“CBO’s baseline budget projections are meant to provide a benchmark that policymakers can use to assess the potential effects of changes in policy; they are not intended to provide a forecast of future budgetary outcomes.”
Thing is though is that US has been able to run a large deficit because the dollar is the reserve currency. Since, until recently, countries had no choice but to use SWIFT for global trade and energy was traded exclusively in dollars, that meant countries had to buy dollars in order to trade them for these resources. Dollar based economy is rapidly shrinking now because US in its infinite wisdom decided to cut one of the biggest commodity producers out of it. So, now we’re seeing more and more bilateral trade happening where countries use their own currencies. This process is developing much more rapidly than anybody expected, and what that means is that the value of the dollar is shrinking.
5.3% is very much still in line as a fairly ordinary deficit compared to many other countries in the world. A little towards the higher end, but not out of the ordinary by any means. The 2027 projection is a fair cause for concern, but the point of this report is explicitly to make sure the American budget doesn’t head that way. To quote:
Thing is though is that US has been able to run a large deficit because the dollar is the reserve currency. Since, until recently, countries had no choice but to use SWIFT for global trade and energy was traded exclusively in dollars, that meant countries had to buy dollars in order to trade them for these resources. Dollar based economy is rapidly shrinking now because US in its infinite wisdom decided to cut one of the biggest commodity producers out of it. So, now we’re seeing more and more bilateral trade happening where countries use their own currencies. This process is developing much more rapidly than anybody expected, and what that means is that the value of the dollar is shrinking.