U.S. Treasury Secretary Janet Yellen will participate in the Global Infrastructure and Investment Forum in New York on Thursday, September 21, 2023.
Pool | via Reuters
The federal government ended the fiscal year in September with a deficit approaching $1.7 trillion. Ministry of Finance announced Friday.
After a year in which some thought the shortfall could exceed $2 trillion, the U.S. imbalance ended up at $1.695 trillion, with a decline of about $320 billion (23.2%) from fiscal 2022. ) increased.
Revenues fell by $457 billion from the previous year, and spending fell by just $137 billion, resulting in a huge deficit. Total spending in the same year was $6.134 trillion.
The budget shortfall will further increase the staggering total US debt, which reached $33.6 trillion earlier this week. Deficit levels eased some after the Supreme Court struck down President Joe Biden’s effort to cancel billions in student loan debt.
That figure has increased by more than $10 trillion since the first quarter of 2020, when the coronavirus pandemic hit and governments ramped up spending to offset the damage it caused to the economy.
About $659 billion of last year’s government spending went toward net interest on accumulated debt, up from $475 billion in fiscal year 2022.
Treasury Secretary Janet Yellen said the administration is “committed to addressing challenges to the long-term fiscal outlook” and pointed to several steps to reduce the deficit over the next decade.
“Despite global headwinds, the U.S. economy remains resilient,” Yellen said. “Previous predictions that the U.S. would enter a recession in 2023 are not borne out.”
Debt financing costs have risen significantly over the past year as the Federal Reserve raised benchmark interest rates to combat inflation. The central bank raised its key lending rate by 5.25 percentage points, and government bond yields responded similarly. The yield on 10-year government bonds remains at 5%. Until 2020, it was less than 1%.
The budget report was released the same week that Biden asked Congress to allocate $105 billion to “national security priorities,” including $61 billion for Ukraine, Humanitarian aid was also provided in Gaza.
