The Committee for a Responsible Federal Budget (CRFB), a nonpartisan budget watchdog, condemned the ongoing U.S. government shutdown as “pointless and wasteful”, while unveiling the staggering $1.8 trillion federal deficit for the fiscal year 2025.
On Track To Borrow Nearly $2 Trillion A Year: CRFB Chief
The fiscal gap was reported in the Congressional Budget Office's (CBO) Monthly Budget Review for September, reflecting concerns around the country's fiscal trajectory amid the ongoing political stalemate.
CRFB President Maya MacGuineas, in a press release on Wednesday, expressed concern over the nation’s estimated borrowing, stating that it remains at an unsustainable level.
The U.S. is projected to borrow close to $2 trillion annually over the next decade.
“How can anyone think this is sustainable?’, MacGuineas said.
The CRFB called on the government to reopen without borrowing more.
MacGuineas highlighted the urgent need to reform Medicare and Social Security to prevent insolvency, and suggested a fiscal commission to cut deficits to 3% of GDP and enforce fiscal discipline.
“If lawmakers don't overcome their differences enough to do their jobs and face the hard work of budgeting, we will lose our status as a superpower,” she said.
Shutdown Strains The Economy
The U.S. economy has been under strain due to the recent government shutdown. The Trump administration had warned of a potential $15 billion weekly GDP loss and over 40,000 job cuts if the shutdown persisted.
The shutdown has also clouded official labor statistics, with alternative data from private firms and banks indicating a cooling labor market, potentially leading to another rate cut by the Federal Reserve.
Despite the shutdown, some analysts, like Fundstrat’s Tom Lee, have expressed optimism about the U.S. economy, citing massive investments in the artificial intelligence sector and the Federal Reserve’s dovish stance as “powerful tailwinds” for the economy.
Price Action
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ: QQQ) climbed 2.91% and 5.17% over the past month, respectively, according to Benzinga Pro data.
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