U.S. national debt is on track to double in 2023. This is projected by the Committee for a Responsible Federal Budget, an organization that promotes a balance in public accounts, which of course is not very happy with the current trend. According to them, there is no single cause that explains the situation.
According to the group's estimate, the deficit is on track to reach $2 trillion for the fiscal year that ends on September 30. The red ink began to increase after 2020 due to the stimulus packages that were approved to combat the Covid-19 pandemic.
What are the culprits of the debt? Marc Goldwein, senior director of policy at the organization, explained that high-interest rates, lower tax revenues and high inflation resulting in higher Social Security and Medicare costs contributed to the deficit.
Wow, deficits are slated to 𝐃𝐨𝐮𝐛𝐥𝐞 this year, from $1 trillion up to $2 trillion, when you exclude student debt cancellation.
This is unprecedented given the economy.https://t.co/b1fI0wHb9n@JStein_WaPo @washingtonpost @BudgetHawks @jasonfurman @Brian_Riedl @M_C_Klein pic.twitter.com/vCIajZJxoG
— Marc Goldwein (@MarcGoldwein) September 3, 2023
"A big part of the story is just that there was sort of a one-time huge revenue surge in 2022 that’s done. But the other stories are that we have structurally deficits really rising in 2023. And that’s a lot of that is because of interest costs," Goldwein explained.
"These things add up. It's not just one thing that's causing us to go from $1 trillion to $2 trillion. It's like six things," he added.
Although he is not very optimistic about the future of the U.S. debt, he predicts that the deficit will decrease during 2024. "I do believe that deficits tend to rise over time. But I think they're more likely to go down than to go up in 2024." he concluded.
The last balanced budget
The last time the United States was in the black was in 2001, a by-product of the last budget that Bill Clinton negotiated with Congress.
"President Clinton's record on fiscal discipline: Between 1981 and 1992, the national debt held by the public quadrupled. The annual budget deficit grew to $290 billion in 1992, the largest ever, and was projected to grow to more than $455 billion by fiscal year 2000. As a result of tough and sometimes unpopular choices made by President Clinton, and major deficit reduction legislation passed in 1993 and 1997, we have seen eight consecutive years of fiscal improvement for the first time in America's history", celebrated at the time by the White House.
