The United States federal government has reported a budget deficit of nearly $1.7 trillion for fiscal year 2023, which ended in September. This represents a 23.2% increase from the previous fiscal year.[0] The deficit has more than doubled from the prior year due to falling revenues and increased spending on Social Security, Medicare, and interest costs on the federal debt.
Data released by the Treasury Department shows that total receipts for the year came in just over $4.4 trillion, a decrease of more than 10% from fiscal year 2022.[1] Outlays fell 2% from almost $6.3 trillion to about $6.1 trillion.[1] In 2023, net interest costs witnessed a significant increase, reaching $659 billion, compared to $476 billion in 2022 and $352 billion in 2021.[2]
The federal budget deficit for fiscal year 2023 was equal to 6.3% of the U.S. gross domestic product (GDP), an increase from the 5.4% reported in fiscal 2022. This deficit surpasses all pre-pandemic deficits.[3]
The U.S. national debt currently stands at a staggering $33.521 trillion, with an additional $28 billion added each day.[4] This amounts to $1.2 billion every hour.[5] The government debt amounts to approximately $100,000 per American citizen, including children.[6]
The deficit has been attributed to various factors, including lower income-tax receipts, rising interest rates, and increased spending.[7] The Biden administration has asked Congress for $100 billion in new foreign aid and security spending, which includes funding for Ukraine, Israel, U.S. border security, and the Indo-Pacific region.[8]
The rising debt and inflation, combined with increased interest costs, have raised concerns about the long-term fiscal outlook for the United States. Interest costs rose almost 40% last year, and it is projected that the country will soon spend more on interest than on national defense.[9]
Despite these challenges, Treasury Secretary Janet Yellen has emphasized the resilience of the U.S. economy. She highlighted the country's ability to navigate global headwinds, with positive job growth and GDP growth exceeding expectations. Yellen acknowledged the need to address the long-term fiscal challenges and maintain a healthy and sustainable economy.
The budget deficit for fiscal year 2023 will likely complicate Congress' efforts to reach a federal spending deal before government funding runs out next month.[10] The widening deficit creates a significant obstacle to reducing government borrowing and addressing the country's fiscal health.
The increasing debt-to-GDP ratio is a cause for concern, with projections suggesting that the debt held by the public could reach 118.9% of GDP by 2033. This represents a significant increase from the current 98.2%.[5] The disparity between debt growth and economic performance raises alarms about the sustainability of the current fiscal trajectory.
Overall, the U.S. budget deficit for fiscal year 2023 has reached historic levels, surpassing all pre-pandemic deficits.[1] The rising debt, falling revenues, and increased spending pose significant challenges for the country's long-term fiscal health. Addressing these challenges will require careful consideration and strategic planning to ensure a sustainable and resilient economy for the future.
0. “U.S. budget deficit up 23 pct in fiscal year 2023 amid rising interest rates” Xinhua, 20 Oct. 2023, https://english.news.cn/20231021/fb8db55dc5844940876b8e6db6e73289/c.html
1. “US: Federal government posted a $1.695 trillion budget deficit in FY 2023” FXStreet, 20 Oct. 2023, https://www.fxstreet.com/news/us-federal-government-posted-a-1695-trillion-budget-deficit-in-fy-2023-202310202015
2. “The Deficit Rose to $1.7 Trillion in 2023. The White House Blames Republican Tax Cuts.” Yahoo Finance, 20 Oct. 2023, https://finance.yahoo.com/news/deficit-rose-1-7-trillion-231704112.html
3. “U.S. federal budget swings back to deficit in last month of fiscal year” Seeking Alpha, 20 Oct. 2023, https://seekingalpha.com/news/4022579-us-federal-budget-swings-back-to-deficit-in-last-month-of-fiscal-year
4. “$106,120,000,000 Added to US Debt in One Week As Rockefeller Capital CEO Issues Warning to Investors” The Daily Hodl, 20 Oct. 2023, https://dailyhodl.com/2023/10/20/106120000000-added-to-us-debt-in-one-week-as-rockefeller-capital-ceo-issues-warning-to-investors/
5. “US Debt Rose By $1.2 Billion Per Hour For The Past 19 Days” Watcher Guru, 11 Oct. 2023, https://watcher.guru/news/us-government-debt-rose-by-1-2-billion-per-hour-for-the-past-19-days
6. “The U.S. government debt per citizen officially crosses over $100,000” Finbold – Finance in Bold, 18 Oct. 2023, https://finbold.com/the-u-s-government-debt-per-citizen-officially-crosses-over-100000/
7. “Federal budget deficit rose to $1.7 trillion in fiscal 2023, Treasury says” Washington Examiner, 20 Oct. 2023, https://www.washingtonexaminer.com/policy/economy/treasury-budget-deficit-1-7-trillion-fiscal-2023
8. “US Budget Deficit Doubles to $1.7 Trillion” Newsmax, 20 Oct. 2023, https://www.newsmax.com/finance/streettalk/u-s-budget-deficit-social-security-medicare/2023/10/20/id/1139096
9. “Peterson Foundation Statement as Deficit Soars” Peterson Foundation, 20 Oct. 2023, https://www.pgpf.org/press-release/2023/10/peterson-foundation-statement-as-deficit-soars
10. “Federal deficit effectively doubled in fiscal year 2023 | News Channel 3-12” KEYT, 21 Oct. 2023, https://keyt.com/politics/cnn-us-politics/2023/10/20/federal-deficit-effectively-doubled-in-fiscal-year-2023
