Welcome to “The Week Ahead” where we take a moment to provide our thoughts on what we can expect in markets and the economy during the upcoming week.

My wife and I are in the process of planning a family vacation. She is the type that enjoys the haute culture and gourmet cuisine of Europe. I, on the other hand, prefer exploring more tropical climes that include warm water beaches, preferably with a surf break. Every year we have to figure out what to do, but eventually it comes down a compromise and, importantly, what makes sense from the standpoint of our budget.

While the politics of planning a family vacation and the politics of Washington are quite different, the federal government releases its annual 2020 budget on Tuesday. The budget resolution’s main purpose is to develop a framework for Congress to consider revenue, spending, and other budgetary considerations including an overall spending limit. Although no dollar amount has been announced, the budget is expected to be in the range of $750 billion.

The president’s proposal will provide a broad outline of his goals for government spending in the fiscal year starting Oct. 1st, when previous spending caps will go back into effect unless Congress votes to raise them again. Lawmakers voted last year to lift the caps and boost spending by $300 billion during fiscal years 2018 and 2019.

Higher government spending, weaker tax revenues, and rising interest rates have boosted budget deficits over the past year, forcing the government to ramp up borrowing. The fiscal budget deficit rose 17% last year, swelling to $779 billion. The Congressional Budget Office said last week annual deficits are expected to exceed $1 trillion starting in 2022, and will average 4.4% of gross domestic product (GDP), over the next decade from calendar year 2019 to 2029—much higher than the 2.9% average of the previous 50 years.

Rising deficits are an issue that will need to be addressed at some point. For now there are plenty of investors willing to buy the U.S. treasury bonds necessary to finance our debt. Interest rates remain at historic lows and the economy remains on firm footing. Of course these issues will need to be dealt with in the medium-term, but the politics of cutting spending or raising revenue (taxes) are all but intractable at the moment.

While the location of our vacation remains uncertain, one thing is for sure; rising government debt and the insanity of Washington are amongst the things I will be trying not to think about while enjoying time with my family.

Data deck for March 11-March 15: