Deficit Doubling as US Economy Grows Shows Why Yields Are at 5%
- Main driver for widening deficit has been a slide in revenues
- Spending rose on debt servicing, Social Security and Medicare
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In a year when the US economy exceeded almost everybody’s expectations, the underlying federal deficit roughly doubled, spotlighting a dire fiscal trajectory likely to only worsen the partisan budget battles in Washington.
The government ran a $2.02 trillion deficit for the fiscal year through September, after adjustments to remove the impact of President Joe Biden’s student-loan forgiveness program, which was scotched by the Supreme Court. The gap is $1.02 trillion more than the prior year.