United States Expected To Post $845 Billion Deficit This Year

According to the CBO ("Congressional Budget Office"), the United States is on track to post a deficit of $845 billion for the FY2013 fiscal year, assuming that "the current laws that govern federal taxes and spending do not change."

The United States is currently in the midst of a four year streak of posting deficits of over $1 trillion:

2009 - $1.413 trillion
2010 - $1.294 trillion
2011 - $1.299 trillion
2012 - $1.1 trillion

$845 billion would still be an embarrassingly high deficit, but it would break the streak of trillion dollar deficits.

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According to the CBO's estimates, the budget deficit will continue to shrink until 2015. After that, a combination of different factors, including an aging population, increasing health care costs and growing interest payments on the federal debt will cause the deficit to start ballooning in size once again. The CBO estimates that the debt held by the public at the end of the 2023 fiscal year will be nearly $20 trillion, or 77% of GDP.

Let's look at the deficit projections from the CBO over the next 11 years:

2013 - $845 billion
2014 - $616 billion
2015 - $430 billion
2016 - $476 billion
2017 - $535 billion
2018 - $605 billion
2019 - $710 billion
2020 - $798 billion
2021 - $854 billion
2022 - $957 billion
2023 - $978 billion

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A few other notes from the CBO's report:

-the national unemployment rate is expected to remain above 7.5% through the end of 2014

-the CBO anticipates that the economy will pick up at the end of 2013

-GDP growth is projected to be 3.4% in 2014, and 3.6% from 2015-2018

-net interest (amount of money that the US spends to service its debt) is expected to grow to $857 billion by 2023

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Source: CBO.gov - The Budget and Economic Outlook: Fiscal Years 2013 to 2023 (*.pdf)

Filed under: General Knowledge