The Treasury opened the fiscal year 2018 with an October budget deficit of $63.2 billion. That is 37.9% larger than the $45.8 billion deficit in October of last year. The primary reason behind this surge in year-over-year deficits was a 21.6% increase in net interest expenses. The annual red-ink problem looks even greater when recognizing that the national debt is already over 105% of Gross Domestic Product (GDP), at nearly $21 trillion, and with an additional $10 trillion projected to be added in the next ten years.

According to the Congressional Budget Office (CBO), the budget deficit grew to 3.5% of GDP for fiscal 2017. But due to the growth in spending for social security, Medicare, and net interest payments, the deficit explodes to 5% of GDP ($1.4 trillion) by 2027.

Hence, it seems absurd for D.C. to pass a tax cut that would pile $1.5-$1.7 trillion on top of all those accumulating deficits and debt. Tax cuts are great, but they must be at least partially offset by spending cuts. Otherwise, interest rates will spike, which will do more harm to the economy than the tax cuts would provide. This is especially the case when debt is more than a nation's total annual GDP.

But back to the issue at hand; debt and deficits are soaring right now, and it is primarily due to rising interest rates. However, you haven't seen anything yet as far as rising debt service payments are concerned, not with $10 trillion worth of negative yielding sovereign debt still floating around the world.

But the key point to understand is that virtually all of the central banks' Quantitative Easing (QE) ends by October of 2018. The Fed will be selling $50 billion each month by then, and the ECB should be winding down its €30 billion to zero around that same timeframe. This means the total monthly dollar amount of QE is in the process of going from around $120 billion each month to zero. The developed world's money printers are in the process of reversing their incredible stimulus measures, and this extrication from interest rate suppression will continue until the global economy sinks into recession and/or equity markets plunge.