 |
| Rising budget deficits and massive public debt are worrying issues for the US economy . (Source: Debt.org) |
According to Bloomberg , the main reason for the increase in the US budget deficit is higher spending, including interest payments on public debt.
Interest on public debt in the first quarter of 2024 increased by $78 billion compared to the same period the previous year, reaching $310 billion. This is also the highest quarterly interest rate on public debt since 2011. The total US public debt now exceeds $34 trillion.
In addition, military and social security spending also increased in the first quarter of fiscal year 2024. Military spending increased 10% year-on-year to $269 billion. Social security spending increased 5% to $717 billion. Total spending for the quarter was $1.6 trillion.
According to the report, government revenue increased from taxes levied on individuals and businesses, but it was still insufficient to offset the country's spending.
Conversely, spending in other sectors such as agriculture decreased due to the end of the emergency agricultural spending program. Agricultural spending in the first quarter of fiscal year 2024 fell by 40%, to $10 billion.
According to CNBC , if the budget deficit continues at its current rate, the US will end 2024 with a deficit of more than $2 trillion.
Rising budget deficits and massive public debt are worrying issues for the U.S. economy. Large budget deficits can lead to higher interest rates, reduced investment, and increased pressure on social programs. Large public debt can also make the U.S. economy more vulnerable to economic shocks.
Source
Comment (0)