Goldman: What Is Going On In The US Is “Usually Reserved For Times Of War”

Friday, September 14, 2018
By Paul Martin

by Tyler Durden
Fri, 09/14/2018

Back in February, when the world was starting to become familiar with the trajectory of US debt and deficit spending under Trump’s fiscal plan, we showed a chart from Goldman which made a troubling forecast: the US fiscal situation was headed for “banana republic” status, or as Goldman put it more politely, “uncharted territory” as a result of soaring federal debt and interest expense.

Now, in a follow up report, Goldman economist Alec Phillips identifies the key risks that will worsen the “already-grim” US fiscal outlook (which he defines simply as “not good”). As a reminder, just yesterday we reported that the US fiscal deficit has resumed its surge, rising 40% Y/Y to $898BN for the first 11 months of the year, following the biggest monthly outlay by the US government in history.

Goldman – which now projects a $1.05tn deficit (4.9% of GDP) for FY2019 – picks up on this and writes that its expects that figure to rise significantly over time, reaching 5.5% of GDP by 2021 and 7% of GDP by 2028. This, Goldman adds ominously, “puts US fiscal policy in uncharted territory in two respects.”

First, running such a large primary deficit (federal revenues minus spending, not counting interest expense) in a period of strong growth and low unemployment is quite unusual, and according to Goldman is “generally reserved for times of war” as shown in the chart below.

The Rest…HERE

One Response to “Goldman: What Is Going On In The US Is “Usually Reserved For Times Of War””

  1. H.T.

    Regarding “U.S. Debt”, We Owe NOTHING. ‘They’ can push numbers All day long and lie to US about debt, while ‘they’ have Stolen TRILLIONS FROM US on Several Occasions, AND Pick Our Pockets EVERY Pay Day for Illegal Income Taxes (Property Taxes Are Also ILLEGAL)AND HAVE REFUSED TO ADDRESS OUR GRIEVANCES:



    WHEREAS, in April 2000, People from all 50 of the several states gathered in Washington, DC and served a Remonstrance upon the U.S. President and the leaders of both Houses of the Congress, seeking Redress (remedy) of Grievances regarding the unconstitutional origin, operation and enforcement of the federal income tax system – specifically, the direct, un-apportioned tax upon the labor of ordinary Americans, and

    WHEREAS, such Petition for Redress was subsequently ignored…

    ALSO: IRS Forces U.S. Citizens To Pay A Percentage Of Their Taxes To The Queen Of England.

    Property Taxes Are Illegal –


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