The Congressional Budget Office (CBO) announced last Friday that the total federal budget deficit for October and November 2023, the first two months of fiscal year 2024, is expected to be $383 billion.
The institution stated that the size of this deficit was $47 billion more than the same period in the previous fiscal year.
Although US fiscal revenue has increased by $108 billion or 19% since the beginning of this fiscal year, expenditures have also increased by $155 billion or 17%.
In October alone, the income was $85 billion higher than the same period last year, due to taxpayers delaying the payment of personal and corporate income tax in areas affected by natural disasters.
The main driving force behind the increase in expenditure - public debt interest
The CBO pointed out that the US government has significantly increased spending in two areas - the Federal Deposit Insurance Corporation and public debt interest.
According to CBO data, in October alone, federal spending increased by $64 billion compared to the same period last year, with net interest expense being the main driving factor, an increase of $33 billion compared to October last year.
In the first two months of this fiscal year, the net interest expenditure on public debt increased significantly by $60 billion, a growth rate of 65%, mainly due to significantly higher interest rates than in the first two months of 2023.
The categories with significant growth in other expenditures are social security and national defense.
The US debt will become more and more huge
To make up for the deficit, the US government may borrow more and more funds, making the debt burden even larger. With high interest rates, the debt burden on the United States is becoming increasingly heavy, which may further exacerbate the deficit problem and lead to a vicious cycle of US finances.
In September this year, the size of the US treasury bond exceeded $33 trillion for the first time in history, and it is now close to $34 trillion.
According to the data of the US Treasury Department, the total interest payments on treasury bond bonds in fiscal year 2023 reached a record $659 billion, almost twice the amount of interest payments in 2020; The ratio of interest expenses to US GDP is 2.45%, the highest since 1998.