US Fiscal Deficit Soars Past $2 Trillion Due to Tax Revenue Drop and High Inflation
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The US government ran a $2.02 trillion deficit in fiscal year 2023, roughly double the prior year, due to decreases in individual income tax receipts and higher inflation costs.
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Individual income tax receipts plunged $456 billion due to declines in financial markets and tax filing extensions granted for disaster areas.
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Inflation drove up federal benefit payments by 8.7% and eliminated Fed contributions to the Treasury, adding over $300 billion to the deficit.
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Higher interest rates increased the government's net interest costs on debt by $184 billion.
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The deficit is expected to shrink in fiscal 2024 but remain above $2 trillion as higher borrowing costs persist.