Peter St Onge Podcast Ep 136 Weekly Roundup: Deficit Soars 20%
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Sep 1, 2025 The ongoing surge in the federal deficit by 20% raises questions about government spending and upcoming Federal Reserve decisions. Germany faces economic turmoil, with strict regulations and rising energy costs influencing political shifts. Social Security is under scrutiny, with fears of bankruptcy stirring debate over potential reforms. Meanwhile, soaring crime rates in America prompt discussions on Trump's law enforcement strategies and the historical factors at play, while exploring international approaches to crime reduction.
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Deficit Surge Driven By Autopilot Spending
- The federal deficit jumped 20% year-over-year as spending soared while the economy did not grow comparably.
- Roughly 96% of the increase came from interest and mandatory programs on autopilot, not discretionary new programs.
Interest And Unfunded Liabilities Are Key Risks
- Interest on the national debt is now the second-largest federal spending category and is partly borrowed.
- Unfunded liabilities for Social Security and Medicare add hundreds of trillions in hidden future obligations.
Force Fiscal Discipline Or Face Fed Money Printing
- Pass a balanced budget amendment to force spending limits and avoid autopilot growth.
- Otherwise expect investors to stop buying treasuries, surging rates, and Fed intervention that debases the currency.