November 14, 2019

Federal Deficit 34 Percent Higher than Last Year

  • Flyover Country

By: Nate James

In Brief:

The federal deficit reached $134 billion in October 2019, which is 34 higher than this time last year.

The Background:

Data from the Treasury Department reveals the United States’ deficit reached $134 billion in October 2019, which is, as The Hill reports, “the first month of fiscal 2020.

According to the Daily Caller, “[Federal Reserve Chair Jerome Powell] told the Joint Economic Committee that the “high and rising federal debt,” which now tops $23 trillion, could make it difficult for the economy to recover from future market downturns.”

Why It Matters:

The Hill reports: “Higher deficits and a growing debt load can raise interest rates and limit the tools policymakers have to fight a recession. They also extract financing costs. In October, for example, the government spent $33 billion on financing the debt, about a quarter of the month’s overall deficit.”

Notable Quotes:

“In a downturn, it would also be important for fiscal policy to support the economy. However, as noted in the Congressional Budget Office’s recent outlook, the federal budget is on an unsustainable path with high and rising debt.”

  • Federal Reserve Chair Jerome Powell

Nate James writes from Texas.

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