Just in May this year, the U.S. government ran a shocking $316 billion budget deficit. This drove the year-to-date deficit to a stunning $1.36 trillion. This is up 14% compared to last year, highlighting the ongoing fiscal crisis. The national debt has exploded to a record $36.2 trillion. This month, we are on the hook for a mind-numbing $92 billion in interest payments alone.
Even controlling for seasonality, government spending soared 2% from April to May. They are up 8% since last May, however. The relentless rise of expenses has been the main driver of the growing deficit. It now accounts for more than 6% of the nation’s gross domestic product (GDP). This unusual set of fiscal pressures highlights the challenge of government spending and raising revenue amid a changing economy.
Even with the increasingly explosive deficit, government receipts were improving. In May, receipts jumped by 15%, to a whopping increase of 6% year-over-year. Unfortunately, these increases in revenue haven’t nearly been enough to make up for the rising expenditures and debt obligations.
The government’s attempts to increase revenue through tariffs were highly successful as well. Perhaps most surprisingly, gross tariff collections look to be an all-time high of $86 billion in 2024. That marks a jaw-dropping 59% jump from this time last year. Since then, gross customs duties have skyrocketed to $23 billion in May alone. This is a huge jump from just $6 billion the same month last year.
For FY2024 and beyond, debt financing will be over $1.2 trillion per fiscal year. In just the first eight months of this year, debt financing has already topped $776 billion. That’s a sign the government is still borrowing when it pays its bills.