US Budget Deficit Estimated to be $2.3 Trillion in 2021
This would be a decrease from 2020, but a historic number for the US deficit data. However, this total does not include the $1.9 trillion stimulus package proposed by the Biden administration because the actual cost cannot be determined yet.
In fiscal 2020, the budget deficit was $3.13 trillion as the nation battled the COVID-19 pandemic and its economic implications. The 2020 value was 14.9 percent of US GDP, but 2021 is forecasted to be 10.3 percent of GDP.
However, the CBO reported that large deficits can be offset by increased GDP growth. “Those deficits, which were already projected to be large by historical standards before the onset of the 2020–2021 coronavirus pandemic, have widened significantly as a result of the economic disruption caused by the pandemic and the enactment of legislation in response,” the CBO said.
The deficit has also contributed to the rise in national debt. The current national debt total is $27.9 trillion with the public portion being $21.8 trillion, slightly larger than the US GDP. By 2031, the CBO estimates that the national debt will climb to $35.3 trillion, or 107 percent of GDP. This would market the highest debt-to-GDP ratio in US history.
Lastly, the CBO expects GDP to grow by 3.7 percent in 2021, lower than the Federal Reserve's forecast of 4.2 percent. In 2020, the economy shrank by 3.5 percent.