The U.S. budget deficit is projected to reach $1.9 trillion in fiscal year 2025, which amounts to 7% of the country’s GDP. This level of deficit is comparable to the red ink seen during the Global Financial Crisis.
Key Figures
- Revenue: $5.2 trillion (17.1% of GDP)
- Spending: $7 trillion (23.3% of GDP)
- Deficit: $1.9 trillion (6.2% of GDP)
Spending Breakdown
- Mandatory Spending: $4.2 trillion (14.0% of GDP)
- Discretionary Spending: $1.8 trillion (6.1% of GDP)
- Net Interest: $952 billion (3.2% of GDP)
Revenue Breakdown
- Total Revenue: $5.2 trillion (17.1% of GDP)
- Projected Growth: Revenue is expected to grow from $5.2 trillion in 2025 to $8.0 trillion (18.3% of GDP) by 2035.
Economic Impact
The high deficit is driven by a persistent gap between spending and revenue. The projected growth in debt and deficits is influenced by various factors, including tax policies and economic assumptions.
Future Projections
- Debt-to-GDP Ratio: Expected to grow from 98% in 2024 to 118.5% by 2035.
- Interest Costs: Projected to increase steadily, from 9% of federal revenue in 2021 to 18% in 2025, and 22% by 2035.
Sources:
https://www.ft.com/content/financial-times-announce-venture-to-fund-ai-development-in-us
https://x.com/JeffWeniger/status/1881432426980978853
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