11/5/2023 0 Comments Federal deficit by yearThis year will likely be added to that list. And it skyrocketed again during the crises that bookended the 2010s: the mortgage crisis and the COVID-19 pandemic. The budget deficit doubled between 20 thanks to a recession and as the War on Terror kicked off. Deficits surged in the late 1970s and early 1980s thanks to high inflation and a series of recessions. The post How the Federal Budget Deficit Doubled in a Single Year appeared first on 's not totally unprecedented to see the federal budget deficit double from one year to the next, as it seems to have done this year.īut those occasions, at least in the past 50 years, have always corresponded with bad stuff happening to the national economy. They are structural problems-either as so-called "mandatory spending" or as a function of the borrowing the government has already done-that will continue to mount until they are meaningfully addressed. The big difference, then, between this year and 2002 (or 1977 or any of the few other times in recent history when the deficit has doubled) is that the drivers of this year's shocking deficit growth are not temporary problems. "We are becoming numb to these huge numbers, but it doesn't make them any less dangerous," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, in a statement last week. The federal government has borrowed $1 trillion since June 15. The current pace of borrowing is staggering. Over the next decade, the federal government will spend $10.6 trillion just to pay the interest on borrowing that's already occurred or is planned-and that total could go up if the federal government has to respond to an unexpected crisis or if lawmakers vote for higher levels of borrowing in future budgets. The rising cost to service the national debt, meanwhile, is a feedback loop created by the other poor decisions and compounded by higher interest rates. Again, they've done nothing about that looming problem. They've also known that as the country ages and, in particular, as the Baby Boomer generation grows old, those programs would be strained. Lawmakers have known that for a long time, and have chosen to do nothing about it. The two big federal entitlement programs are both on a trajectory toward insolvency. That's not the case for the other three categories driving this year's deficit, all of which are going to keep getting worse for the foreseeable future. That's likely a blip and not a long-term problem-federal tax revenue was unexpectedly high a year ago, and bigger swings in annual revenue tallies seem to be becoming more common, as The Wall Street Journal explained in May. The fourth category is falling federal income tax revenue, which is responsible for about $171 billion of the added deficit this year versus last. As Axios points out, those three categories added more than $390 billion to the deficit relative to last year-a tremendous jump in a single year. The drivers of this year's rising deficit are four-fold, and three of them are the result of decades of poor policymaking: rising interest costs on the $33 trillion national debt, higher Social Security outlays, and more Medicare spending. America does not seem to be in a crisis at the moment, but the government's balance sheet certainly is.Īnd it is that way, in large part, because of the government's own programs-as opposed to, say, an external event like a pandemic or a mortgage crisis. ![]() Unemployment is low, the economy has been growing steadily, and inflation has significantly abated. At first blush, that might not appear to double last year's budget deficit of about $1.4 trillion, but keep in mind that last year's total included roughly $400 billion for President Joe Biden's student loan forgiveness plan-funds that were never spent because the Supreme Court struck down the proposal, as the CBO notes.Ĭompared to those other historical examples, however, this year seems like an outlier.
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