Federal Deficit To Drop in 2014 and 2015
According to the CBO (Congressional Budget Office), the United States is on track to post a $514 billion deficit in the 2014 fiscal year.
If the projections turn out to be accurate, the United States would post a deficit in 2014 that equals 3% of GDP, which is in line with the average over the past 40 years.
Also, the CBO estimates that the country should post a deficit of $478 billion in FY2015, provided that "current laws governing federal taxes and spending generally remain unchanged." A $478 billion deficit would equal 2.6% of the projected GDP for 2015.
That's the good news.
The bad news? Budget deficits are expected to trend higher following FY 2015. Let's take a look at the projections from 2016 until 2024:
FY2016 - $539 billion deficit
FY2017 - $581 billion deficit
FY2018 - $655 billion deficit
FY2019 - $752 billion deficit
FY2020 - $836 billion deficit
FY2021 - $912 billion deficit
FY2022 - $1.031 trillion deficit
FY2023 - $1.047 trillion deficit
FY2024 - $1.074 trillion deficit
The CBO blames a number of factors, including slower growth in the labor force and increasing interest payments on the debt, as reasons why the nation's deficits will start to trend higher once again in FY2016.
According to the CBO, the United States will be shelling out a staggering $880 billion in net interest payments by FY2024. Compare this to the $221 billion that was paid out in the 2013 fiscal year.
Some people are focusing on the fact that the deficits in FY2014 and FY2015 will be more in line with historical norms, while others are pointing to the rapidly increasing deficits from FY2016-FY2024 and shining the spotlight on them.
One point that can't be refuted - the United States is currently on track to post over $8 trillion in deficits between now and the end of the 2024 fiscal year.
Source: CBO.gov - The Budget and Economic Outlook: 2014 to 2024
Filed under: General Knowledge