At Extreme Investor Network, we bring you the latest insights and analysis on the economy that you won’t find anywhere else. Let’s dive into the recent news about the U.S. budget deficit in fiscal year 2024.
The U.S. Treasury Department recently reported that the Biden administration faced a budget deficit exceeding $1.8 trillion in fiscal 2024, marking an increase of over 8% from the previous year. This deficit is the third highest on record, with only 2020 and 2021 surpassing it due to pandemic-related spending.
Despite record receipts totaling $4.9 trillion, the deficit was driven by outlays of $6.75 trillion, resulting in a shortfall of $1.833 trillion. This has led to a significant increase in government debt, which now stands at $35.7 trillion, up $2.3 trillion from the previous year.
One of the contributing factors to the growing debt and deficit is the Federal Reserve’s actions to combat inflation by raising interest rates. In fact, interest expenses for the year reached $1.16 trillion, surpassing the trillion-dollar mark for the first time.
The government did manage to run a surplus in September, thanks in part to calendar effects that pushed benefit payments into August. However, the deficit as a share of the total U.S. economy remains above 6%, well above the historical average.
Looking ahead, the Congressional Budget Office (CBO) projects that deficits will continue to rise, reaching $2.8 trillion by 2034. The office also expects the debt to grow from its current level of around 100% of GDP to 122% by 2034.
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