The amounts: The federal budget deficit for fiscal year 2024 was $1.8 trillion, which is 8% more than the previous year. This was because the government continued to spend more than it brought in. The end of the calendar year was September 30.
Important facts: The Treasury Department said that in 2024, government income rose 11% to $4.9 trillion and spending rose 10% to $6.7 trillion.
Around 34% more money was spent, or $882 billion, in 2024 to pay off the public debt’s net interest.
During the fiscal year, the total amount of money the federal government borrowed from the people rose by $2 trillion, to $28.2 trillion.
In the big picture, the deficit for fiscal year 2024 is only smaller than the deficits for the first two years of the COVID-19 outbreak.
It is not common for the government to have such big debts when the economy is doing well. Jerome Powell, the head of the Federal Reserve, has said that the debt can’t keep going up.
But neither Republicans nor Democrats seem eager to talk about cutting the debt.
In a note to clients, Terry Haines, founder of Pangaea Policy, said, “It’s clear that neither campaign wants to talk about financing, debt, or deficit at all, and the endless giveaways from both sides show that they aren’t serious about it at all.”
People also think that the growing U.S. debt is one of the world’s biggest economic risks. The head of the International Monetary Fund, Kristalina Georgieva, said earlier this week that the world economy was going through a time of low growth and high debt. She told countries like the U.S. to cut back on their spending.
Don Kohn, who was No. 2 at the Fed under former Chair Ben Bernanke, said that the higher debt will also be hard for the Fed.
The government budget will have to pay more and more for interest on the debt, and Kohn told CNBC on Friday that both Republicans and Democrats will want lower interest rates so they can pay for their favorite plans.
He said, “It does look like the pressure on the Fed is going to be really high.”
The debt was seen as proof of bad money management by both Democrats and Republicans in Congress and the White House by the nonpartisan Committee for a Responsible Federal Budget.
“We need to put our national debt on a path that will allow it to go down,” CRFB head Maya MacGuineas said in a statement.
She said, “Failing to do so will lead to a smaller economy, higher interest rates, more geopolitical threats, generational inequality, and a higher chance of a fiscal crisis.”
