Federal budget deficit to reach nearly $2 trillion this year, CBO projects | Fox Business
By: Fox Business
S E E D E D C O N T E N T
The nonpartisan Congressional Budget Office (CBO) on Tuesday released an update to its 10-year budget outlook that found the federal budget deficit will approach $2 trillion in the current fiscal year.
The CBO's latest estimate projects the budget deficit will reach $1.9 trillion in fiscal 2024, which would be the third largest in U.S. history and $200 billion larger than last year's deficit. The projected $1.9 trillion deficit would trail only the $3.1 trillion fiscal 2020 deficit and the $2.7 trillion fiscal 2021 deficit that were incurred during the peak of spending on pandemic-era relief programs.
In February, the CBO estimated that the fiscal 2024 deficit would be more than $1.5 trillion, but it revised that figure upward by $408 billion, or 27%, in the latest update in response to new government spending since its prior report.
The agency explained that the increase was due to several factors, including $145 billion in additional student loan debt cancellation by the Biden administration; $70 billion due to costs associated with resolving bank failures in 2023 and 2024 that will eventually be almost entirely offset; and about $60 billion in funding for Ukraine, Israel and countries in the Indo-Pacific region.
NATIONAL DEBT TRACKER: AMERICAN TAXPAYERS (YOU) ARE NOW ON HOOK FOR $34,750,498,829,987.55 AS OF 6/18/24
Annual budget deficits are expected to surge in the years ahead, surpassing the $2 trillion threshold with a projected deficit of nearly $2.2 trillion in 2030. Deficits would continue to rise in the following years, topping $2.8 trillion in 2033 and 2034 in the CBO's analysis.
The CBO projected that the debt held by the public relative to gross domestic product (GDP) - a metric used by economists to gauge the size of the national debt relative to the economy - would rise to 99% of GDP this year. That means the national debt held by the public would be essentially the same size as the U.S. economy.
The debt held by the public is projected to rise from nearly $28.2 trillion this year to more than $50.6 trillion in 2034, according to the CBO's projections.
That would push the share of debt held by the public to 122% of GDP a decade from now, according to the estimate. It would also set a new record for the highest public debt as a percentage of GDP, which currently stands at 106% of GDP in 1946 when the U.S. was demobilizing after the conclusion of World War II - a threshold the CBO projects the U.S. will exceed in 2027.
For comparison, the gross national debt, which consists of both the debt held by the public and Treasury securities held by government accounts like the Social Security trust funds, would reach $35 trillion by the end of fiscal 2024 and soar to $56.9 trillion in fiscal 2034, per the CBO's projection.
Higher spending levels recently implemented by the Biden administration and Congress prompted the CBO to revise its fiscal 2024 deficit projection higher by 27%. (FOX Business/Photo illustration / Fox News)
Much of the increase in the size of annual budget deficits and the national debt is attributable to rising mandatory spending on programs like Social Security and Medicare because of America's aging population, in addition to the cost of servicing the national debt rising because of higher interest rates and the debt itself continuing to grow.
Social Security accounted for 4.4% of federal spending on average from 1974 to 2023, while Medicare and net interest expenses each averaged 2.1% over that period. By 2034, the CBO projects those figures will rise to 6% for Social Security, 4.2% for Medicare and 4.1% for interest expenses.
"At nearly the size of the economy, the national debt is truly astounding," Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget, said in a statement.
"With debt growing out of control, we need leadership now more than ever. This should be domestic issue number one in the presidential campaign. It's time for Presidents Biden and Trump to put forward plans to fix our debt. And it's long past time for Congress to act," she added.
No MAGA, no FASCIST, No Trump
I realize these seriously limit the discussion to the topic.
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Yet, our 2024 deficit at 1.9 billion is down from 3.1 billion in 2020?
Good!
SMH Read it again. It is TRillion
Real good, but you got your number wrong.v It $1.9 Trillion, not billion.
Maybe some perspective will help you remember:
A million seconds is 12 days. A billion seconds is 31 years. A trillion seconds is 31,688 years.
So you think lowest in pandemic history (2-3 years) is better than the other 245 years?
Strange thinking that is.
How cute. You didn't read the article. Maybe if you did you would have seen the 1st sentence of the 2nd paragraph:
Which completely shows you are wrong (again).
That indicates 3000+ billion which is 3+ Trillion..SMH
Nice use of graphs in Microsoft Excel. Still doesn't change the fact you didn't read the article or comprehend the difference between Billions and Trillions.
So you think that we overspent on COVID in 2020 and 2021, I agree.
What's interesting about the graph is that the 2023 deficit hasn't come down to 2018 or 2019 levels, not even close. What's up with that?
And completely refusing to admit the math error made.
Perhaps he's the victim of 'new' math in a public school education.
That's Washingtonian math.
I think that you’re right.
I'm sure it came in handy for her bartending skills...
$34.8 Trillion divided by 333.4 million population means we each only owe $104,379.00.
Time to pony up.
That is absolutely wrong, the only people who need to pay their fair share, and the worthless takers fair share are the rich.
Interest payments on our federal debt this year will be over $800 Billion. That's around 13.2% of our federal expenditures this year. Interest payments on the debt are expected to rise to 16% of expenditures in 10 years.
They don't in the short term but do very much in the long term. What was the context with Cheney, what was the whole quote?
The only thing Reagan and Biden have in common is Alzheimer's.
Over 95 pct of the Federal debt was created after Ronald Reagan's inauguration on Jan. 20, 1981. That's right we fought two world wars, lost Korea, lost Vietnam, built the biggest nuclear arsenal in the history of humankind, and landed a man on the moon with less than 5 pct of the national debt. What has the Federal government accomplished after the neoliberals took over?
So, yes, fiscal irresponsibility has been a bipartisan disaster. But, hey, the neoliberals got theirs. We got the biggest, bestest financial pirates in the world. We're number one!
With the inflation caused by Bidenomics, a $1.5 trillion deficit has to increase to $1.8 trillion just to keep pace with inflation. And keeping pace with inflation won't contribute to real GDP growth. Biden has to spend a lot more just to keep the numbers looking good.
Biden has created a bear trap for the US economy. The need for increased deficit spending to maintain GDP will only throw gasoline (yes, fossil fuel) on the inflation fire. And Federal austerity now will tip the US into recession. But the economy has been so distorted by Bidenonmics that any recession may become another Great Depression. The global economy could end up dumping the dollar as the global reserve almost overnight. The US cannot rely on the central banks of other countries to save the reserve dollar; it's just as likely the central banks will be divesting from the dollar and rushing for safety. That's when Bidenomics really hits the fan.