ALBAWABA - A budget deficit of $1.8 trillion was recently reported by the United States Treasury for the fiscal year 2024, marking the third greatest in the history of the country and reflects a growing gap of $138 billion in comparison to the recorded deficit for the fiscal year 2023, according to Reuters.
Increased government expenditure on many important programs and a sharp rise in interest payments on the national debt are among the primary causes of the significant budget imbalance, with fiscal management emerging as a key topic for all political parties, the report has raised tensions ahead of the presidential election in November.
A substantial portion of the increase may be attributed to a 29% increase in interest payments on the national debt, which reached over $1 trillion for the first time ever, driven by a combination of higher interest rates and greater borrowing, which led to the debt reaching such unprecedented levels.
The nation's economic stability is under growing strain, as the interest burden currently representing around 4% of the national gross domestic product. Increased spending on the military, Social Security, and Medicare all contributed to the budget imbalance, and new funding for Israel and Ukraine only making matters harder.
On the other hand, thanks to increased corporate and individual tax revenues, U.S. revenue reached a record $4.9 trillion. Even with this expansion, the sharp increase in expenditure could not be countered. According to the Treasury, the deficit increased from 6.2% in 2023 to 6.4% as a percentage of GDP.
