IT IS a central principle of Keynesian economics that governments should stimulate demand during recessions by cutting taxes and boosting spending. Conversely, when times are good and unemployment is low, budgets should be kept in check. However, these conventional counter-cyclical prescriptions seem to hold little sway with White House policymakers. In his first year in office, Donald Trump has turned Keynes on his head, pushing through a massive fiscal stimulus during America’s second-longest economic expansion in history.

The shift in America’s fiscal outlook has been swift. In recent months the president has signed both a tax-cut package that will cost as much as $1.9trn over the next decade and a two-year budget deal that increases federal spending by $300bn. As a result, the Congressional Budget Office (CBO), a non-partisan number-cruncher, reckons that America’s deficit will be $800bn in 2018 and $980bn in 2019, or 57% above forecasts made before Mr Trump’s election (see chart).

With lower revenues and higher spending, Uncle Sam is now borrowing at a historic clip. This week the Treasury Department reported that the federal government borrowed $488bn in the first quarter of 2018, equivalent to $5.4bn every day. The Treasury now estimates that federal borrowing will reach $1.1trn this fiscal year, similar to the amount borrowed in 2011 when America was recovering from its worst economic downturn since the Great Depression.

All of this red ink is beginning to rattle debt markets. Concerns about an overheating economy and increased debt issuance have helped drive the yield on 10-year Treasury bonds up to 3%. The Federal Reserve, meanwhile, is expected to continue raising interest rates and drawing down its portfolio of Treasury debt in the coming years. On Monday, Treasury Secretary Steven Mnuchin insisted that the bond market will absorb all of this new debt. “It’s a very large, robust market” he told Bloomberg TV. “I think the market can easily handle it.” This is probably true. Whether lawmakers in Washington will be happy when the bill comes due is another matter.

Correction (May 6th, 2018): A previous version of the chart in this piece incorrectly stated the units as $bn instead of $trn. Sorry.