The U.S. Treasury released data highlighting that the fiscal budget deficit topped $1 trillion for calendar year 2019 for the first time since 2012, increasing 17.1% in 2019 from 2018’s budget deficit that had grown by more than 28.2% from the previous year. Tax receipts increased by 5%, as corporate taxes rebounded, but outlays were up 7.5% to $4.5 trillion as federal spending for both the military and healthcare increased. This trend has continued into 2020’s budget with the deficit growing by 12% through the first 3 months.

Importantly, this fiscal stimulus continues to support the U.S. stock market, as the deficit, a liability of the U.S. government, is an asset of the private sector. According to a WSJ article, “annual deficits are projected to more than double as a share of the economy over the coming decades, as a wave of retiring baby boomers pushes up federal spending on retirement and health-care benefits.” Again, this is not necessarily bad news if the demand for goods and services fueled by this incredible stimulus doesn’t exceed our economy’s ability to meet that demand through greater production.