I imagine it looks like runaway inflation based on a post 1985 or so baseline.

At first glance, it sure seems like the Fed.gov continues really excessive deficit spending.  I am not sure it is unsolvable or unprecedented based on demographics and global trade flows, but it sure doesn’t seem indefinitely sustainable.  The Fed Reserve seems to have trimmed its sails and is pulling back.

My question, as a relatively inexperienced market observer, is what will it take to bring fiscal policy back into alignment with more historical norms?  Higher T bill interest?  Political winds change the approved federal budget?  I have been thinking the economy has been coasting on inertia for a while as lower interest rates resetting to higher rates slow consumer spending and business investment but apparently it’s ability to absorb more debt has not been met yet.

I saw a blog post a while back that the Treasury has an extra $1T balance right now because they just collected up a bunch of taxes, so that will probably get poured into the economy in this election year maintaining some liquidity/froth in the economy.  Is this a classic situation that the next elected government inherits the hot potato as finally consumer confidence turns?  I sure have had my portfolio positioned wrong for 18 months but talking to fairly financially conservative friends I am not the only one.