If you thought it was scary when the Treasury Department recently dropped a financial bomb, announcing the deficit for fiscal year 2023 was $1.7 trillion dollars, please sit down before you read on. The Treasury just released new numbers projecting borrowing of $1.6 trillion in just the first half of fiscal year 2024.
As if the 23 percent growth in last year’s deficit wasn’t enough, the Treasury is now on track to borrow almost as much in just six months as it did in the previous 12. That’s nearly a doubling of the deficit. It means the Treasury is on track to borrow over $3 trillion this fiscal year, 50 percent more than previously estimated by the Congressional Budget Office.
Besides the pandemic in 2020, America has never run deficits like the previous, current, or next quarter, at $1 trillion, $776 billion, and $816 billion, respectively. In the four quarters that preceded the pandemic, the Treasury had an average deficit of under $300 billion, about half to one-third of today’s levels.
To be clear, borrowing was much too high even before 2020. But the fact that borrowing is now almost three times as high speaks volumes about how quickly things are spiraling out of control. The federal government’s financial situation resembles a stereotypical bomb from a cartoon or cinema, spherical in shape with an impractically long fuse.