The US Treasury has confirmed that the country’s calendar-year deficit has reached a record high of $2 trillion in 2024, with borrowing exceeding $2 trillion and $711 billion in the first three months of fiscal year 2025. The increase is attributed to strong economic growth and ongoing inflation concerns.
According to Maya MacGuineas, president of the Committee for a Responsible Federal Budget, there is no justification for such a large deficit, especially when compared to the $1.3 trillion reduction in debt over ten years achieved in 2023. The committee expresses concern that the fiscal health is deteriorating rapidly and warns that upcoming decisions will have significant consequences.
The new administration’s priorities will focus on spending, revenues, and legislation, including budget reconciliation, government funding, and discretionary spending caps. However, experts caution that competing interests and political expediency may lead to increased borrowing, exacerbating the already projected record-high deficit in just two years.
As major trust funds face insolvency in less than eleven years, lawmakers are urged to avoid backsliding and make responsible decisions to avoid further debt accumulation.
Source: https://www.crfb.org/press-releases/treasury-confirms-calendar-year-2024-deficit-tops-20-trillion