U.S. deficit will exceed $1.8 trillion in 2024 | Wilnesh News

The U.S. Treasury Department said on Friday that the Biden administration expects the budget deficit to exceed $1.8 trillion in fiscal year 2024, an increase of more than 8% from the previous year and the third highest on record.

Despite a modest surplus in September, the shortfall totaled $1.833 trillion, an increase of $138 billion from the same period last year. The only years the U.S. has run large deficits were 2020 and 2021, when the government poured trillions of dollars into spending related to the Covid-19 pandemic.

The deficit came despite record revenue of $4.9 trillion, well below spending of $6.75 trillion.

Government debt has increased to $35.7 trillion, an increase of $2.3 trillion from the end of fiscal 2023.

A worsening factor in the debt and deficit situation is the high interest rates resulting from a series of rate hikes taken by the Federal Reserve to combat inflation.

Full-year interest expenses reached US$1.16 trillion, breaking the US$1 trillion mark for the first time. Excluding interest earned on government investments, the total reaches a record $882 billion, the third-largest expenditure in the budget, surpassing all other items except Social Security and Health Care.

A Treasury official said the average interest rate on all government debt will be 3.32% in 2024, up from 2.97% the previous year.

The government did run a $64.3 billion surplus in September, partly the result of a calendar effect that pushed benefit payments into August, which was the largest month of the year with a $380 billion deficit. .

The deficit accounts for more than 6 percent of the U.S. economy, which is unusual during an economic expansion and well above the historical average of 3.7 percent over the past 50 years, according to the Congressional Budget Office.

this The Congressional Budget Office estimates The deficit will continue to rise, reaching $2.8 trillion by 2034.