The U.S. budget deficit surged by 23%, reaching $1.7 trillion, with an increase of $320 billion, during the year following the passage of the Inflation Reduction Act by the Biden administration, which was presented as a measure to address the government’s funding gap.
The deficit saw an explosive increase as revenue dropped by $457 billion compared to the previous year, while expenses only reduced by $137 billion. Total spending for the year amounted to $6.134 trillion.
Spending would’ve been greater had the Supreme Court not ruled Biden’s student loan forgiveness program unlawful.
The deficit contributes to the U.S. national debt, which the government reported earlier this week had climbed to $33.6 trillion. That amounts to over $250,000 per household and more than $99,000 per individual in the United States.
According to the Pete G. Peterson Foundation’s calculations, if every American household contributed $1,000 per month for debt reduction, it would take 21 years to pay down the debt.
Many factors contribute to the rise in the deficit, primarily driven by the soaring inflation triggered by the hefty spending programs, such as the Inflation Reduction Act with its $500 billion in new expenses and tax breaks, the $1.9 trillion American Rescue Plan, and $1 trillion in infrastructure investments, all pushed by the Biden administration.
Due to inflation, Social Security’s cost-of-living adjustments caused a $134 billion increase in the program’s expenses, for example.
The Biden administration continues to claim the economy is doing extremely well despite polls showing widespread rejection of Biden’s leadership on the economy.
“The U.S. economy remains resilient despite global headwinds” Treasury Secretary Janet Yellen stated.
However, the Conference Board said this week that it still expects the economy to fall into a “shallow recession” next year.
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