The United States federal budget deficit is the difference between the government’s total expenditures and its total revenue. When the government spends more money than it takes in, it runs a deficit. The deficit is financed by borrowing money from investors, which adds to the national debt.
Key Facts
- December 2023 Deficit: In December 2023, the federal government ran a deficit of $129 billion, which was $44 billion more than the deficit recorded in December 2022.
- Fiscal Year 2022 Deficit: In Fiscal Year 2022, which ended in September 2022, the federal government ran a deficit of $1.4 trillion. This was approximately half the deficit incurred in FY2021. The decrease in the deficit was due to increased revenues and reduced outlays compared to the previous fiscal year.
- Financing a Deficit: To pay for a deficit, the federal government borrows money by selling Treasury bonds, bills, and other securities. This borrowing contributes to the national debt, which is the accumulation of the government’s borrowing and associated interest owed to investors.
Recent Deficit Trends
In December 2023, the federal government ran a deficit of $129 billion, which was $44 billion more than the deficit recorded in December 2022. This increase in the deficit was primarily due to a surge in spending on Net Interest and Social Security, partially offset by a decrease in outlays related to the COVID-19 Pandemic Refundable Credits.
For the entire fiscal year 2022, which ended in September 2022, the federal government ran a deficit of $1.4 trillion. This was approximately half the deficit incurred in FY2021. The decrease in the deficit was due to increased revenues and reduced outlays compared to the previous fiscal year.
Financing the Deficit
To pay for a deficit, the federal government borrows money by selling Treasury bonds, bills, and other securities. This borrowing contributes to the national debt, which is the accumulation of the government’s borrowing and associated interest owed to investors. As of December 2023, the national debt stood at $26.8 trillion.
Conclusion
The United States federal budget deficit is a complex issue with a long history. In recent years, the deficit has been declining, but it remains a significant concern for policymakers. The deficit is financed by borrowing money from investors, which adds to the national debt. The national debt is a burden on future generations and can have negative consequences for the economy.
Sources:
- https://www.pgpf.org/the-current-federal-budget-deficit
- https://fiscaldata.treasury.gov/americas-finance-guide/national-deficit/
- https://bipartisanpolicy.org/report/deficit-tracker/
FAQs
What is the United States deficit?
The United States deficit is the difference between the government’s total expenditures and its total revenue. When the government spends more money than it takes in, it runs a deficit.
What is the current deficit of the United States?
In December 2023, the federal government ran a deficit of $129 billion.
What is the national debt of the United States?
As of December 2023, the national debt stood at $26.8 trillion.
How is the deficit financed?
The deficit is financed by borrowing money from investors, which adds to the national debt.
What are the consequences of running a deficit?
Running a deficit can lead to higher interest rates, inflation, and a decrease in the value of the dollar. It can also burden future generations with debt.
What are some ways to reduce the deficit?
Some ways to reduce the deficit include increasing taxes, cutting spending, or a combination of both.
Why is the deficit important?
The deficit is important because it can have a significant impact on the economy and the well-being of future generations.
What is the history of the deficit in the United States?
The United States has been running a deficit for most of its history. The deficit has fluctuated over time, but it has been on a general upward trend in recent decades.