The Federal Deficit Is Growing. This Is Why.
New York TimesNov 03, 2023
The Facts
On Friday, the US Treasury Department announced the federal government posted a $1.695T budget deficit in fiscal year 2023. The fiscal year 2022 deficit was $1.375T.
The budget shortfall is equal to 6.3% of gross domestic product (GDP) — the third-largest on record. Last year, the budget gap stood at 5.4% of GDP.
The Spin
Republican narrative
Deficit-trimming measures, including deep budget cuts and curbing spending on social safety net programs, are crucial to reducing the federal deficit and preventing a government shutdown next month. The current borrowing path is unsustainable, especially if interest rates stay high for an extended period.
Democratic narrative
There's no need to panic. Leaving aside the student loan effects, the surge in budget deficit isn't because of a rise in spending but due to a steep fall in revenues. It's not a spending problem but a revenue problem — thanks to Republican tax cuts and decades of trickle-down economics.