The budget for the fiscal year surged to an amount of $1.8 trillion, the report from the U.S. Treasury Department indicates as it clocks at 8 percent more than that was accrued last year. This saw the shortfall at the third level ever in the history of the nation at $1.833 trillion. It was a staggering $138 billion more than it was in 2023. Only two years-the years 2020 and 2021-were the nation more deficit-ridden, and again this largely resulted from the massive amount of money the government spent combating the COVID-19 pandemic.
While the federal government achieved all-time high revenues, at $4.9 trillion, the total government outlays have risen to a record $6.75 trillion to finance this deep deficit. The national debt has ballooned to $35.7 trillion, an amount a staggering $2.3 trillion above the end of fiscal 2023. Rising interest rates by the Federal Reserve have been among the chief villains behind this fiscal malaise.
With interest earnings on government investments thrown in, the net interest outlay stands at a record of $882 billion- the third largest of all expenditure categories, this time behind only Social Security and healthcare. Average interest on government debt ran up to 3.32% from 2.97% at year-end, adding to budget pressure.
While it is true that the government reported having a surplus of $64.3 billion in September, mainly due to time-driven effects that pushed some benefit payments into August, this was clearly not enough to erase the deficit for the year. September’s surplus contrasted with August, where the largest monthly deficit was reported for this year with a staggering deficit that reached $380 billion.
The deficit is now more than 6% of the U.S. economy, far higher than at any other point in history except during periods of recession and incomparably above its average of 3.7% since the government began running it fifty years ago. The deficits are likely to increase and would reach $2.8 trillion by 2034, according to the Congressional Budget Office’s projections. For instance, the debt of the nation is to be increased from its current level, that is near 100% of GDP to 122 percent by 2034 according to projections from the CBO.