US budget, dollar in best shape it's been in several years. If anything, it's limiting inflation

I have heard crocodile tears from some right-wingers and Russian trolls on social media about the cost of $40 billion in aid that the Biden Administration wants to send to Ukraine. This bill has been slowed down by Russian agent Sen. Rand Paul of Kentucky under one of those stupid Senate rules that have no connection to a functional Legislature, and used the US's budget deficit as a cover for his opposition.

aul, who unsuccessfully sought his party's 2016 presidential nomination, argued that the added spending was more than the U.S. spends on many domestic programs, was comparable to Russia's entire defense budget and would deepen federal deficits and worsen inflation. Last year's budget deficit was almost $2.8 trillion but is likely headed downward, and the bill's spending is less than 0.2% of the size of the U.S. economy, suggesting its impact on inflation would be negligible.

"No matter how sympathetic the cause, my oath of office is to the national security of the United States of America," Paul said. "We cannot save Ukraine by dooming the U.S. economy."

"Dooming the US economy?" With something that is less than 1/500th of US GDP and a fraction of this year's cost of the GOP Tax Scam? You know, the Scam that Rand Paul, Ron Johnson and other "deficit hawks" voted for in 2017?

But if Rand truly cares about the deficit, he should be welcoming the news that came out earlier in that week from the US Treasury that shows the deficit shrinking at a rapid pace as wages and jobs have come roaring back over the last year.

The U.S. government posted a $308 billion surplus in April - a record for any month - as receipts nearly doubled from a year earlier amid a strong economic recovery from the COVID-19 pandemic, the Treasury Department said on Wednesday....

The previous record monthly surplus was $214 billion in April 2018. April has traditionally been marked by budget surpluses due to the traditional April 15 tax filing deadline, but deficits for that month were recorded in 2009, 2010 and 2011 after the financial crisis, and in 2020 and 2021 due to the pandemic, a Treasury official told reporters.

It's also worth noting that 2020 and 2021 had the tax filing deadline delayed for COVID-related reasons, so it's not entirely an apples-to-apples comparison. But we've also seen declines in government spending as CARES and ARPA aid programs wind down.

Outlays last month were $555 billion, down 16% from April 2021. The decline reflected lower spending for COVID-19 relief, including the end of direct payments to individuals and lower payments for unemployment and small business relief.

For the first seven months of the 2022 fiscal year, the government reported a deficit of $360 billion, down 81% from the year-earlier deficit $1.932 trillion. It was the lowest deficit for the first seven months of a fiscal year since a $344 billion gap for the same period of fiscal 2017, prior to the enactment of a Republican-backed tax cut package.

Let's repeat that last part again. It's the lowest budget deficit through April since the GOP Tax Scam became law.

Both 2018 and 2019 had year-end budget deficits under $1 trillion. If 2022 ends up around those levels, it would be well above the $1.8 trillion that the Congressional Budget Office estimated back in November. Those CBO projections are slated to be updated in the next 2 weeks, and I'll be intrigued to see just how well the fiscal picture has improved as a result of these recent numbers.

This is also an interesting paradox related to our inflationary times. Because wages (on a nominal level) and jobs have gone up so much, especially at the lower end of the wage scale, we are seeing more income being taxed, and more sent to Social Security and Medicare than we expected. Right now Social Security/Medicare payroll revenues are up 6.2%, and Hospital Insurance revewnues are up 8.7%. That, combined with record excess deaths from COVID, overdoses and other causes likely means Social Security and Medicare will be in better long-term shape when the new Trustees reprot comes out in a few months.

That may be morbid, but that's also reality.

Lastly, the other economic worry from a large budget deficit is the possibility of a drop in the US dollar and related inflation due to worthlessness of the currency. But that's the opposite of what's been happening, as the dollar is at a 20-year high due to the fact that the rest of the world is in bigger disruption and economic concern than we are.

So not only is Rand Paul covering up for his sketchy Russian connections when he turns down aid to Ukraine, his "concern" over not wanting to add to the US budget deficit is a complete crock. Our fiscal situation is in the best place it's been in several years, and our dollar is the strongest it's been in 2 decades. It also gives more evidence that much of our "inflation" is simply businesses taking advantage of disruptions to raise prices and grab higher profits. So far, American consumers have been continuing to pay for that rent-seeking, but recognize the situation for what it is.

The US budget deficit is not a problem, and we have plenty of room to pay for things even without reversing the GOP Tax Scam that increased the incentives for excess profit-seeking and speculation that explains a lot of the inflation we are dealing with.