The Fed budget: The deficit is going down... but it's still huge

5/26/22 8:00PM

The US government is still "living beyond its means", with the federal budget deficit expected to come in at $1 trillion for this year according to new forecasts from the CBO.

That's a huge amount of money, but it is actually way down on the $3 trillion or so that the deficit has averaged over the last two years, when government spending dramatically increased in response to the pandemic as multiple stimulus checks, tax credits and other relief programs were introduced. As the chart above shows, those deficits were worth almost 13-15% of the entire value of the US economy.

‍Debt on your debt

‍Going forward the CBO forecasts that the US federal deficit is likely to steadily rise from around 4% of GDP this year to around 6% of GDP by 2032. Incredibly, less than half of that estimated deficit is actually from spending — the majority is actually just interest payments on debt we already owe.

Hyunsoo Rim

appy birthday

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Apple is turning 50 today and it doesn’t look a thing like its younger self

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The entrance of Allbirds seen from Hayes St. in San Francisco, Calif.

Allbirds, the once buzzy multibillion-dollar sneaker startup, is selling up for $39 million

That’s less than 1% of its peak market cap about four years ago.

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JetBlue is raising its bag fees as fuel costs squeeze airlines

JetBlue will reportedly hike its bag fees, as the cost of jet fuel continues to climb amid the war in Iran. It’s the latest example of carriers finding ways to push rising costs onto travelers.

Last week, United Airlines CEO Scott Kirby said that if fuel prices remain elevated, fares would need to rise another 20% for his airline to break even this year.

As CNBC reported, when one airline raises fees, others tend to follow.

Earlier this month, JetBlue hiked its first-quarter outlook for operating revenue per seat mile to between 5% and 7%, saying that strong Q1 demand helped “partially offset additional expenses realized from operational disruptions and rising fuel costs.” Now, the carrier appears to be making moves to further boost revenue to offset those costs.

Earlier on Monday, JetBlue rival Alaska Air lowered its Q1 profit forecast. The refining margins for the carrier’s cheapest fuel option — sourced from Singapore and representing about 20% of Alaska’s overall supply — have spiked 400% since February.

JetBlue did not immediately respond to a request for comment.