The Federal Deficit Approaches $1 Trillion
The federal deficit for fiscal year 2019 rose 26% from last year to $984.4 billion — its highest point in seven years, according to The Associated Press.
Billions in spending led to the massive deficit, which is expected to remain around $1 trillion for the next ten years, the AP reported in October.
President Donald Trump campaigned on reining in government spending, but nearing the end of his first term, he has failed to make good on the promise. The AP noted that the “deficit has been rising every year for the past four years,” generating “a stretch of widening deficits not seen since the early 1980s, when the deficit exploded with President Ronald Reagan’s big tax cut.”
Unlike previous stretches of obscenely high deficits, the current situation is taking place during a record-long economic expansion as opposed to recession. Analysts have warned that should the U.S. encounter a recession, the deficits currently projected will expand, potentially to a degree that would cause interest rates to soar.
“Such a development, if it sparked worries about the stability of the U.S. financial system, might produce the type of deficit crisis they have been warning about for so long,” the AP noted.