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.
The surge is a powerful illustration of a fiscal path that’s triggered warnings from economists, politicians and credit rating agencies. It also helps explain why yields on longer-term US Treasuries are reaching highs unseen since before the global financial crisis, with the government needing to issue ever more debt to cover the shortfall of revenues relative to spending. Ten-year yields surpassed 5% on Monday.
The US government had a $2 trillion budget deficit for the fiscal year through September, a gap that's $1 trillion more than the prior year. https://t.co/M69cTCs6Yl pic.twitter.com/LMOoK3Nxen
— Lisa Abramowicz (@lisaabramowicz1) October 24, 2023