We are now adding 1 trillion in debt every 100 days thanks to the insane spending spree of the Democrats and Joe Biden
In May, the U.S. government’s budget deficit reached $347 billion, a notable increase from the $240 billion recorded in the same month last year, exceeding expectations which had projected a $250 billion deficit. This brings the deficit for the first eight months of fiscal year 2024 to $1.202 trillion, which contrasts with the full fiscal year 2023 total of $1.695 trillion.
News:
The U.S. government budget deficit totaled $347 billion in May, up from a $240 billion deficit in the same month a year earlier, according to the latest Monthly Treasury Statement data. This surpassed the consensus estimate of $250 billion. pic.twitter.com/u9eKNQloG7
— Ace Mcgillicutty (@Mcgillicutty883) June 13, 2024
The month saw government outlays increase by 22% to $670 billion, while revenues rose by 5% to $323 billion. Major spending was allocated to Medicare and Social Security, costing $142 billion and $123 billion respectively. For the fiscal year to date, expenditures on Social Security and Medicare have reached $960 billion and $607 billion, respectively.
A significant expense was net interest, which at $87 billion in May alone, surpassed defense spending and totaled $601 billion over eight months. It’s projected that by the end of fiscal year 2025, interest payments on Treasury debt securities will exceed $1.14 trillion. This equates to nearly 80% of all personal income taxes, which were around $143 billion for May.
The US government's budget posted a deficit of $347 billion in May 2024, expanding form a $240 billion gap a year earlier.https://t.co/Cgg9xKHnO6 pic.twitter.com/H5NkCWbMKn
— TRADING ECONOMICS (@tEconomics) June 12, 2024
The 12-month rolling deficit from June 2023 to May 2024 is now $1.6 trillion, an increase of $108 billion over the prior period, accounting for just over 6% of the gross domestic product (GDP). The Committee for a Responsible Federal Budget suggests that without the effects of the student loan cancellation — deemed illegal last year — the deficit would be closer to $2.1 trillion.
Maya MacGuineas, president of a prominent public policy organization, expressed concern over the continuous borrowing by the federal government. She highlighted the urgency of addressing the fiscal issues as the country has already borrowed $1.2 trillion this fiscal year, averaging $4.9 billion a day.
MacGuineas also noted the compounded difficulties of rising interest rates, persistent inflation, and looming trust fund insolvency that need to be addressed to correct the nation’s fiscal trajectory. The Congressional Budget Office (CBO), in its Monthly Budget Review prior to the official numbers, confirmed that the fiscal year-to-date deficit had increased by $38 billion compared to the same period last year.
Federal revenues have increased by $294 billion (10% year-over-year), while outlays rose by $332 billion (8% year-over-year). Additional spending pressures are anticipated this year due to administrative measures related to student loans and international assistance.
The first eight months of fiscal year 2024 have seen a 42% increase in interest payments, totaling an additional $185 billion. Mandatory spending, such as for Social Security and Medicare, has also risen by 6%.
Treasury Secretary Janet Yellen has been actively managing the challenge through the auction of short-term securities to cope with higher interest rates. Despite these efforts, the government faces the daunting task of refinancing more than $9 trillion of national debt over the next 12 months at potentially higher rates.
This fiscal scenario presents a challenge in attracting both foreign and domestic investors to purchase U.S. debt. Recent Treasury auctions, like the $70 billion five-year notes auction that saw dismal demand, highlight the difficulties faced by the financial markets in absorbing new Treasury debt, exacerbating the strain on U.S. financial stability.
Major Points
- The U.S. government’s budget deficit reached $347 billion in May, significantly exceeding the anticipated $250 billion and marking an increase from the previous year’s $240 billion in the same month.
- Total deficit for the first eight months of fiscal year 2024 stands at $1.202 trillion, compared to $1.695 trillion for the entire previous fiscal year.
- Major spending included Medicare at $142 billion and Social Security at $123 billion for May, with significant fiscal year-to-date expenditures in these areas as well.
- Interest payments on national debt have surged, projected to surpass $1.14 trillion by the end of fiscal year 2025, currently consuming nearly 80% of all collected personal income taxes.
- Challenges in managing U.S. debt are compounded by rising interest rates and poor market reception to new Treasury securities, indicating increasing financial strains.
Susan Guglielmo – Reprinted with permission of Whatfinger News
