United States Deficit Hits 7 Year High
The United States recently reported that it had the highest deficit in seven years, according to The Wall Street Journal.
The U.S. spent almost $1 trillion more than it received. The defecit, at a 7 year high, would have been higher without a rebound in corporate tax revenue. The deficit has now increased for the fourth year in a row, marking the longest stretch of growth since the 1980s.
The fiscal year ended on September 30, and the U.S. Treasury reported that the deficit increase to $984 billion from $779 billion in the year prior. The increase can be partly attributed to tax cuts decreasing revenue growth, and the government budget that increased government spending.
Since 2016, the annual deficits have increased by 68 percent. If the trend continues, deficits are expected to exceed $1 trillion annually, and even more so if the economy weakens. Deficits typically shrink during economic expansions due to rising household income and corporate profits increase tax revenue for the government.
Economics constantly change and as life expectancy increases the government must spend more money on long term costs. Government programs such as Social Security and Medicare are expected to continue to increase deficits in the future.
The U.S. trade deficit increased for the fourth year in a row and is at a seven-year high, and is expected to increase in the future.