Budget deficits kept going up and reached a new high

Budget deficits kept going up and reached a new high

When the US economy is not well, every country in the world will feel its impact. It’s just a matter of how big or how small. Well, their budget deficits are going up and has reached a new high.

According to AI overview by google, this is budget deficit definition. “A budget deficit occurs when a government spends more money than it receives in revenue during a specific period of time. The amount by which spending exceeds revenue is called deficit spending”

Briefly, the government is spending more than the revenue it gets, so it has to borrow to cover this amount and thus it’s in a deficit.

Article in nst.com.my The US budget deficit during the presidency of Joe Biden has hit the all-time high at US$6.6 trillion, according to Sputnik calculations based on data from the US Treasury Department.

The US government’s expenses over three and a half years under Biden exceeded revenues by US$6.6 trillion — the highest in the entire history of these statistics.

Thus, in 2021, the indicator amounted to US$2.8 trillion, or to 13 per cent of GDP.

The following year, the negative balance decreased to US$1.4 trillion, or 6.3 per cent of GDP, but last year it increased to US$1.7 trillion, or 7.6 per cent of GDP. Over the first six months of this year, it amounted to US$758.2 billion, and the share of GDP on a rolling annual basis was 5.5 per cent. Do read the full article here: Article in nst.com.my

US$6.6 trillion is a huge number

The US government would just have to borrow more to cover their deficits. Would this change if there’s a new government in place? I do not think it’s possible to do much with just a new government. Perhaps a lot of things would have to change as well because without fiscal discipline which will require some ‘suffering’ this is unlikely to change.

Some of these fiscal disciplines include, ‘subsidy rationalisation’ and surely people will start to make a lot of noise too. Another one may be to raise taxes and this will surely be another no-no for any government of the day too. This is why the government debt will just become worse and the deficit will continue to build up. Really a fine balance for the government versus the deficits.

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