Just servicing U.S. debt has now risen to be #6 on the list of things the federal government spends the most money on, as news is released from the Treasury that the federal deficit has grown by 23% since this time last year and is expected to reach a staggering $1 trillion by the end of the current fiscal year on September 30. The federal deficit, the amount by which spending exceeds revenues for a given fiscal year, now stands at $747 billion. This is not to be confused with the even more alarming federal debt, the total amount the U.S. owes, which now stands at over $22.4 trillion.
A large part of the problem with expanding deficits, and therefore debts, is the Trump administration’s 2017 GOP-led tax law, which particularly gave corporations and the wealthy large income tax cuts, leading to a drop in revenues for the federal government. Trump had insisted that economic growth would make up for the drop in income tax revenues, but that has so far not proven to be true. While total revenues from all sources have increased by 2.5%, according to The Hill, expenditures have increased by 6.6%, in part due to bipartisan agreements to increase spending. According to The Hill:
The federal deficit rose to $747 billion over the past nine months, a 23 percent increase compared to the same period in the previous fiscal year, according to Treasury figures released Thursday. The Treasury Department said in the same report that the deficit is expected to exceed $1 trillion by Sept. 30, the end of the fiscal year. …While the largest spending categories remained Social Security, defense, Medicare and health, the sixth-highest expenditure was for servicing the debt. The amount spent on net interest was also the fastest growing category, increasing 16.4 percent, nearly twice as fast as defense spending and well above increases for Medicare, health, and Social Security. The new figures come just a few months after the first tax season under the GOP’s 2017 tax law…
The Congressional Budget Office (CBO), which is nonpartisan, previously projected that the Trump-led GOP 2017 tax law would add $1.9 trillion to the national debt over the course of 2018-2028; certainly it already seems to be moving us in that direction. Here one is particularly reminded that Donald Trump, who as a candidate touted himself as a massively successful businessman and who as president tends to disregard the advice of economists in favor of his own opinions, actually filed for business bankruptcies six times, as reported by The Washington Post. Filing bankruptcy is not really an option for the country, however.