The U.S. fiscal deficit hit $1.06 trillion in 2018 but is it really that bad?

The U.S. fiscal deficit hit an annualized $1.06 trillion in 2018 but relatively speaking it isn’t that bad. The fiscal deficit had hit $1.5 trillion in 2009 in the aftermath of the financial crisis and the current level is the most since 2012.

US federal net borrowing until Q4 2018

And it isn’t that bad as a as percentage of GDP as well,

Interest payments on Federal debt hit $566.68 billion in 2018, which is the highest on record but …

US Federal Interest Payments until Q4 2018 US Federal Interest Payments until Q4 2018 10 year view

… but relative to GDP it is 1.59% which isn’t that high.

 

Federal receipts (including taxes and social insurance contributions) were $3.57 trillion and expenditure was $4.57 trillion in 2018.

US Federal receipts and expenditure upto Q4 2018 US Federal receipts and expenditure upto Q4 2018 10 year view

Gross U.S. Federal Debt as percent of Gross Domestic Product (GDP) hit 105% in 2018, the highest since 1946. The U.S. fiscal deficit might not be that bad but growing outstanding debt is definitely a problem.

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