The budget deficit just doubled to $2 trillion. Don’t expect it to shrink anytime soon.
While much attention has been (justifiably) focused on the brutal attacks in Israel, the Congressional Budget Office (CBO) quietly released some alarming numbers. The budget deficit for the 2023 fiscal year—which concluded September 30—topped a staggering $2 trillion. This not only doubled the 2022 budget deficit, it also became the largest single-year deficit increase in American history, outside of the temporary emergencies of both World Wars, the Great Recession, and the 2020 pandemic.
In fact—outside of those aforementioned emergencies—this year’s budget deficit is the largest in American history, equaling 7.7 percent of GDP. Those earlier emergency-driven deficits could each be justified as an unavoidable yet temporary one-time cost that a growing economy could absorb gradually. By contrast, today’s structural deficits are substantially more perilous because they are projected to continue growing larger essentially forever. Simply put, never before has Washington run such large deficits during relative peace and prosperity.
(Necessary caveat: While a deficit of $1.69 trillion has been commonly reported, President Joe Biden’s declared-and-then-blocked student loan bailout induced a federal accounting glitch that essentially classified more than $300 billion in 2023 spending within the 2022 budget totals. Yet the actual federal debt held by the public rose by $2 trillion in 2023, and this article’s figures remove that accounting glitch).
Continue reading the entire piece here at The Dispatch (paywall)
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Brian M. Riedl is a senior fellow at the Manhattan Institute. Follow him on Twitter here.
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