It technically was another government shutdown, the 2nd in just the last 3 weeks, but this one lasted only 5 ½ hours. The agreement reached by Congress and signed into law by President Trump not only pushed off for 6 weeks (to 3/23/18) the deadline to finalize the spending levels for fiscal year 2018 (a 12-month period already 4 ½ months old), but it also authorized $296 billion in additional government expenditures through 9/30/19. The spending increase, split $165 billion for defense and $131 billion for domestic programs, overrides the spending caps put into law in August 2011 that were designed to reign in government outlays over the subsequent 10 years. Senator Jeff Flake (R-AZ), speaking for many lawmakers, said “the problem is the only time we discover bipartisanship is when we spend more money” (source: Congress).
Included in the weekend legislation was a suspension of our nation’s debt ceiling limit. The deferral will allow our government to borrow as much money as needed between now and 3/01/19 to satisfy our country’s obligations. Our national debt, currently at $20.5 trillion, is projected to reach $22 trillion by 3/01/19 (source: Committee for a Responsible Federal Budget).
In the 50 years from February 1968 to February 2018, the S&P 500 has had 19 declines of at least 10% but less than 20% or once every 2.6 years, including last week’s 10.2% drop through the close of trading on Thursday 2/08/18. A correction is defined as a stock market decline of at least 10% but less than 20% (source: BTN Research).
SHORT-TERM – 48.4% of Treasury debt at the end of FY 2017 (9/30/17) had a maturity of 3 years or less, i.e., debt that will mature by 9/30/20 and will either be rolled over or paid off (source: Treasury Department).
WOW – 25% of California’s residents receive their health insurance through Medicaid. Only New Mexico (31%) and West Virginia (26%) have a higher percentage of Medicaid beneficiaries (source: Kaiser Family Foundation).
TOP TEN – The top 10% of US taxpayers (based upon 2015 tax data) reported adjusted gross income (AGI) of at least $138,031, received 47% of all AGI and paid 71% of all federal income taxes for the year (source: IRS).
BIG CITY PEOPLE – 50% of the US population lives in just 143 counties in the USA, i.e., just 4.6% of the 3,142 counties throughout the nation are home to half our citizens (source: Census Bureau).