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| Rising budget deficits and huge public debt are worrying issues for the US economy . (Source: Debt.org) |
Bloomberg said the main reason for the increase in the US budget deficit is due to 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 last year, reaching $310 billion. This is also the highest interest on public debt in a quarter since 2011. The total US public debt has now exceeded $34,000 billion.
Military and welfare spending also increased in the first quarter of fiscal 2024. Military spending increased 10% year-over-year to $269 billion. Social welfare spending increased 5% to $717 billion. Total spending for the quarter was $1.6 trillion.
The report said that increased budget revenue from taxes collected from individuals and businesses still could not offset the country's expenditure.
In contrast, spending in some other areas, such as agriculture, is down due to the end of emergency agricultural spending. Agricultural spending in the first quarter of fiscal 2024 is down 40% to $10 billion.
According to CNBC , if the budget deficit continues at the current rate, the US will end 2024 with a deficit of more than $2,000 billion.
Rising budget deficits and a huge public debt are worrying issues for the US economy. Large budget deficits can lead to higher interest rates, reduce investment and put pressure on social programs. Large public debt can also make the US economy more vulnerable to economic shocks.
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