Tracking The Federal Deficit: May 2019
The Congressional Budget Office reported that the federal government generated a$207 billiondeficit inMay, the eighth monthof Fiscal Year 2019, for a total deficit of $738 billionso far this fiscal year.Maysdeficit is41 percent more than the deficit recorded a year earlier inMay 2018. If not for timing shifts of certain payments, the deficit would have been7 percent larger than the deficit inMay 2018. Total revenues so far inFiscal Year 2019increased by2 percent , while spending increased by9 percent , compared to the same period last year.
Analysis of Notable Trends this Fiscal Year to Date: Corporate income tax receipts were down by 9 percent compared to last year, reflecting the lower marginal corporate tax rate enacted in the Tax Cuts and Jobs Act of 2017. Further, customs duties increased by 78 percent versus last year, due to the imposition of new tariffs. On the spending side, Department of Defense spending increased by 10 percent compared to last year, particularly on military operations, maintenance, procurement, and R& D. Finally, net interest payments on the federal debt continued to rise, increasing by 16 percent versus last year due to higher interest rates and a larger federal debt burden.
Budget Deficit Trends In The Us
The budget deficit should be compared to the country’s ability to pay it back. That ability is measured by dividing the deficit by gross domestic product . The deficit-to-GDP ratio set a record of -26.68% in 1943. The deficit was then only about $55 billion, and GDP was only $203 billion, both much lower than 2022 numbers.
The deficit-to-GDP ratio is much lower in 2022, even though the country is working with trillions of dollars in budget deficits and GDP. That’s because GDP is much higher than it was in 1943. GDP was nearly $24 trillion at the end of 2021.
Federal Budget Deficit Fell To $14 Trillion As Pandemic Spending Eased
The gap between what the government borrows and what it spends narrowed amid less spending and higher tax receipts.
Send any friend a story
As a subscriber, you have 10 gift articles to give each month. Anyone can read what you share.
Give this articleGive this articleGive this article
WASHINGTON The federal budget deficit fell to $1.4 trillion for the 2022 fiscal year, from $2.8 trillion a year ago, a reduction driven primarily by the winding down of pandemic emergency spending and a surge in tax receipts, according to the Treasury Department.
President Biden trumpeted the deficit reduction on Friday morning, saying the fact that it was cut roughly in half was evidence that his economic policies were working. With soaring inflation as one of the top concerns among voters ahead of tight congressional elections, Mr. Biden has often cited a shrinking budget deficit as a way to bring down rising costs.
Today we have further proof that were rebuilding the economy in a responsible way, Mr. Biden said during his remarks from the White House. Were going from historically strong economic recovery to a steady and stable growth while reducing the deficit.
Its mega-MAGA trickle down, Mr. Biden said. He blamed Republicans for fueling the deficit during the Trump administration with large tax cuts. The kind of policies that have failed the country before, and itll fail it again, he said.
Also Check: Deals 4 Me Now.com
The Deficit As A Percentage Of Gdp
While debt is sometimes measured as a dollar amount, it’s often measured as a percentage of the country’s gross domestic product .
The Congressional Budget Office projected in February 2021 that the year’s deficit would be 10.3% of U.S. GDP. After the American Rescue plan, that percentage was increased to 15.6%. Before the pandemic, the deficit for 2021 was projected to be $966 billion, at 8.6% of GDP. By the end of the fiscal year 2021, the deficit was 12.4% of GDP.
Us National Debt Growth Statistics
23. The ratio of US national debt held by the public to the US GDP is expected to reach nearly 127.41% by 2027.
According to the US debt graph based on CBOs baseline projections, which assume that the current laws on taxation and spending will not change, the federal budget deficit is expected to increase substantially over the next few years.
The public debt-to-GDP ratio has dropped since its drastic increase in 2020 when it reached 134.24%. However, the projections show the ratio will start rising again from 2024.
24. Data on the US national debt by year show that gross federal debt will grow to $45.3 trillion by 2032.
For the 2022 fiscal year, the gross federal debt, which includes both public and intragovernmental debt, is expected to be $30.6 trillion, with the current levels showing that the actual figures might overshoot this estimate. The current estimate of $45.3 trillion for 2032, therefore, might prove conservative unless future administrations take measures to curb the budget deficit.
25. The gross domestic product is expected to reach $36.68 billion by 2032, as per the latest national debt by year chart.
Recommended Reading: Best Sites For Auctions
How The Debt Compares To Gdp Plus Major Events That Impacted It
Kimberly Amadeo is an expert on U.S. and world economies and investing, with over 20 years of experience in economic analysis and business strategy. She is the President of the economic website World Money Watch. As a writer for The Balance, Kimberly provides insight on the state of the present-day economy, as well as past events that have had a lasting impact.
The U.S. national debt grew to a record $31.12 trillion in October 2022. It has grown over time due to recessions, defense spending, and other programs that added to the debt. The U.S. national debt is so high that it’s greater than the annual economic output of the entire country, which is measured as the gross domestic product .
Throughout the years, recessions have increased the debt because they have lowered tax revenue and Congress has had to spend more to stimulate the economy. Military spending has also been a big contributor, as has spending on benefits such as Medicare. In 2020 and 2021, spending to offset the effects of the COVID-19 pandemic also added to the debt. In 2022, tax increases on the wealthy and corporations decreased the future debt outlook, but student loan forgiveness increased it.
One way to look at the national debt is by comparing it to GDP each year, as well as other major events that have impacted it. Below, we’ll dive into the U.S. national debt per year and what caused it to grow over time.
Us Deficit: Understanding The Us Federal Deficit
The US federal deficit has been a hot topic in the news lately. There have been headlines about the deficit hitting $3.2 trillion in 2020 in the wake of the COVID-19 pandemic and political pundits talking about the deficit equalling the economy for the first time since World War II. And while all of that sounds impressive and slightly scary, wouldn’t it be great to know what that actually means?
You May Like: Is Filing For Bankruptcy Worth It
Tracking The Federal Deficit: February 2021
The Congressional Budget Office estimates that the federal government ran a deficit of $312 billion in February 2021, the fifth month of fiscal year 2021. This months deficitthe difference between $246 billion in revenue and $558 billion in spendingwas $77 billion more than last Februarys. The deficit so far in fiscal year 2021 has climbed to just over $1 trillion, an 83% year-over-year increase . Year-over-year, total spending has risen by 25% and revenues have increased by 5%.
Analysis of Notable Trends: Increased spending in February, and fiscal year 2021 as a whole, mostly resulted from pandemic relief legislation. For instance, the Small Business Administrations Paycheck Protection Program accounted for most of the $133 billion spending increase from last February to this one. SBA outlays soared to $91 billion this February compared to only $100 million in the same month last year. The other largest spending changes were greater outlays on unemployment compensation and $17 billion less in refundable tax credit payments because of a delayed start to the tax filing season this year.
Despite a historic recession, revenues were 5% higher in the first five months of fiscal year 2021 than during the same period last year . This healthy growth is surprising, especially when compared to the onset of the last major recession: In the first five months of fiscal year 2009, revenues plunged 11% year-over-year.
The Us Deficit And Covid
While spending was already high at the beginning of 2020, the COVID-19 pandemic caused the US government to spend even more. This resulted in an economic recession that is likely to have long-lasting effects on the US deficit and that has influenced the entire economy, including individuals, corporations, and government agencies at the local, state, and federal levels.
In fact, a recent study from the Center on Budget and Policy Priorities shows that the pandemic has resulted in high rates of hardship for US families, with tens of millions of people suffering from unemployment and struggling to find the means to pay for food and shelter. The impacts on children have been especially difficult.
US businesses have also been hard-hit by the pandemic, and small businesses have paid a particularly high price. Many businesses have had to close their doors. According to a study by the McKinsey Global Institute and Oxford Economics, it could take more than five years for US small businesses to recover from the effects of the pandemic, with many never reopening. Businesses in the arts and entertainment accommodations and food services education services transportation and warehousing manufacturing and mining, quarrying, and oil and gas extraction industries are those that are likely to have the longest recovery.
Read Also: How To File For Bankruptcy In Maryland
Tracking The Federal Deficit: June 2020
The Congressional Budget Office reported that the federal government ran a deficit of $864 billion in June, the ninth month of fiscal year 2020. This monthly deficit is more than 100 times larger than last Junes deficit of $8 billion. This difference came from a sizable drop in revenues, which were down 28% from last June , and especially from a massive increase in outlays, up 223% from last June . The budget deficit so far this fiscal year has surged to $2.7 trillion, $2 trillion more than at the same point last year. As exemplified by June, the cumulative difference stems from a drop in revenues13% lower than at the same point last yearand a much bigger leap in outlays49% higher than at this time last year.
The drop in revenue between last June and this one was due almost entirely to the administration delaying the deadline for quarterly tax payments from June 15 to July 15. Monthly revenue was down $93 billion compared to a year ago, of which $43 billion came from delaying corporate tax payments while $42 billion came from delaying individual and payroll tax payments. CBO expects most of this delayed revenue to eventually be collected, although some will be lost as businesses fail before the new payment deadlines.
Us National Debt By Year Statistics & Facts
The growing debt of the United States has been a matter of discussion for several years. Given the countrys position as the worlds biggest economy, this issue impacts everyones lives.
These essential statistics on the US national debt by year give a detailed understanding of the issue. How and why has the US national debt grown over the years? What is the current situation? What risks, if any, could come about as a result of this growing national debt? Read on to learn the answers to all these questions and more.
You May Like: Can My Wife File For Bankruptcy Without Me
Tracking The Federal Deficit: September 2021
The federal deficit for September 2021 was $59 billion, approximately $65 billion less than the deficit for September 2020. This deficit was the difference between revenues of $460 billion and spending of $519 billion. Although individual and corporate tax payments in September typically produce a large surplus, COVID-19 relief spending eclipsed them and led to a September deficit for the second year in a row.
Revenues increased by $87 billion in relation to the same month last year. The increase was mostly caused by a 23% rise in income and payroll taxes and a 71% increase in corporate income tax receipts.
Spending rose $22 billion year-over-year. Notably, spending by the Department of Education was 107% higher than in September 2020. An upward revision of $95 billion to the departments estimated net subsidy costs of loans and loan guarantees was driven partially by pandemic-related causesincluding the extension of pauses on the payment of loan principal and interest and the collection of loans in defaultand partially by re-estimates of how much the federal government would be repaid on its outstanding portfolio. Spending on refundable tax credits increased $21 billion year-over-year primarily due to the monthly advanced Child Tax Credit payments authorized by the American Rescue Plan earlier this year.
Tracking The Federal Deficit: April 2020
The Congressional Budget Office reported that the federal government generated a $737 billion deficit in April, the seventh month of fiscal year 2020. Aprils deficit is a $897 billion swing from the $160 billion surplus recorded a year earlier in April 2019. Aprils shortfall brings the total deficit so far this fiscal year to $1.48 trillion, which is 179% higher than the same period last year. Total revenues so far in FY2020 decreased by 10% , while spending increased by 29% , compared to the same period last year.
Recommended Reading: What Does Chapter 11 Bankruptcy Mean
Heres Where The President Stands After The Midterm Elections
- A Defining Issue: The shape of Russias war in Ukraine and its effects on global markets in the months and years to come could determine President Bidens political fate.
- Beating the Odds: Mr. Biden had the best midterms of any president in 20 years, but he still faces the sobering reality of a Republican-controlled House for the next two years.
- 2024 Questions: Mr. Biden feels buoyant after the better-than-expected midterms, but as he turns 80, he confronts a decision on whether to run again that has some Democrats uncomfortable.
- Legislative Agenda: The Times analyzed every detail of Mr. Bidens major legislative victories and his foiled ambitions. Heres what we found.
Deficit hawks were quick to attribute the deficit reduction under Mr. Biden to the phasing-out of pandemic relief spending, including the presidents $1.9 trillion American Rescue Plan. And they warned that Mr. Bidens plans to forgive certain amounts of student debt would weigh heavily on the nations finances going forward.
Republicans said Mr. Biden was misleading Americans about the deficit as he tried to embrace the mantle of fiscal responsibility and argued that the presidents policies had fanned inflation.
President Biden is ignoring the facts about his own spending to fit his political narrative, Representative Jason Smith, a Republican from Missouri, He says deficits are going down because of his policies, but in reality hes spending more and fueling higher prices.
What Causes The National Debt To Increase
Sometimes the government needs to increase spending to stabilize the economy, and protect Americans and businesses from unexpected economic conditions.
During The Great Recession , for example, Congress passed legislation injecting $1.8 trillion into the economy. But that pales in comparison to the $4.5 trillion the Trump and Biden administrations have pumped into the economy since the Covid pandemic began in March 2020.
However, there are other reasons the national debt increases, even during years where spending is moderate and the economy is in good shape.
You May Like: Can Filing Bankruptcy Stop Car Repossession
Which Party Runs Larger Budget Deficits
Economists Alan Blinder and Mark Watson reported that budget deficits tended to be smaller under Democratic presidents, at 2.1% potential GDP versus 2.8% potential GDP for Republican presidents, a difference of about 0.7% GDP. Their study was from President Truman through President Obama’s first term, which ended in January 2013.
Tracking The Federal Deficit: August 2020
The Congressional Budget Office estimates that the federal government ran a deficit of $198 billion in August, the eleventh month of fiscal year 2020. This deficitthe difference between $223 billion of revenues and $420 billion of outlaysis $3 billion less than last Augusts, although this apparent improvement is an illusion created by shifts in the timing of certain payments. Without these timing shifts, this Augusts deficit would have been $106 billion greater than last Augusts. The cumulative deficit in FY2020 has risen to $3.0 trillion, an increase of $1.9 trillion from this point last year.
Analysis of notable trends: Cumulative revenue for the fiscal year is down 1% from this point last year, while cumulative outlays are 46% higher. August repeated this asymmetry, with revenues 2% lower than last Augusts and outlaysnetting out the timing shifts described above27% higher.
Thanks to a strong economy, this years revenue through March had been running 6% above last years. Then COVID-19 hit, and revenues from April through August have come in 9% lower than last year, due to both the loss in economic activity and legislation responding to the pandemic.
CBO now projects that the total deficit this fiscal year will run to $3.3 trillion, more than triple last years and the largest deficit as a share of the economy since 1945.
You May Like: Can Someone File Bankruptcy Without An Attorney
A Century Of Deficits
Chart 4.04: Federal Deficit Since 1900
Todays annual federal deficit, the difference between outlays and revenue in a single year, always seems dangerous and unprecedented. In fact, you need a warto really get a big deficit. The peak deficits came during World War I and World War II , as the chart shows.The deficits of the Great Depression only came to about five percent of GDP,and the big $1.4 trillion deficit for FY 2009 amounted to 9.8% of GDP. In 2015 the federal deficit had come down to 2.43 percent GDP. In the COVID year 2022 the federal deficit was 5.7 percent GDP.