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In fiscal year 2024, the U.S. government is grappling with a substantial budget deficit, following a deficit of $381 billion. This fiscal imbalance corresponds with a significant uptick in spending, which has risen by 17 percent compared to previous periods. Addressing these financial challenges becomes a priority as policymakers navigate the economic landscape.
By The Numbers
In November, total expenses amounted to $589 billion, reflecting a 17 percent rise compared to the corresponding period last year. The surge in federal spending was primarily attributed to Social Security at $116 billion, Medicare at $79 billion, and finally national defense costing $70 billion. Net interest payments ranked as the fourth-largest budget item, totaling $72 billion. Meanwhile, total receipts reached $275 billion, with individual income taxes and social insurance and retirement revenues constituting the majority of government revenue for November, marking a 9 percent year-over-year increase.
The federal deficit for the first two months of fiscal year 2024 now stands at $381 billion. Ahead of the official Treasury data release, the Congressional Budget Office had projected a $317 billion budget deficit for November in its Monthly Budget Review.
Maya MacGuineas, President of the Committee for a Responsible Federal Budget, highlighted the pressing issues facing Congress this holiday season, emphasizing the substantial borrowing of $383 billion in the initial two months of the fiscal year. The total is equivalent to $6 billion borrowed daily, without any substantial changes in behavior during that period.
The National Debt
According to the latest Treasury data, the national debt has reached $33.85 trillion as of December 14, with projections indicating it is poised to surpass $34 trillion by the year’s end or at the beginning of 2024. Following the debt-ceiling agreement between House Speaker Kevin McCarthy and President Joe Biden on June 2, the national debt has experienced a substantial increase of approximately $2.4 trillion.
The country has taken on more costly debt and is accumulating it at an accelerated pace. Notably, credit-rating agencies Fitch and Moody’s have taken notice of this trend, downgrading Washington in response to fiscal deterioration and government dysfunction. Consequently, the country has lost its AAA status in recent months, and a new threat has emerged on the economic horizon.
Questionable Treasury
Wall Street is closely monitoring Treasury auctions, which have traditionally been uneventful but have recently gathered attention due to the magnitude of the Treasury’s debt reporting. In October, the Treasury announced plans to borrow $776 billion in the government’s first quarter and an additional $816 billion in the first three months of 2024.
The Treasury market has experienced a cooling-off period since the heightened volatility that began in September. After reaching 16-year highs of 5 percent, medium- and long-term yields have been on a downward trend. For instance, the 30-year bond, which exceeded 5.1 percent in October, is now hovering around 4.3 percent. Investors should be mindful of inflation and interest rate risks when involving the Treasury. Treasuries offer liquidity and tax benefits, but their lower yields may not suit those seeking higher returns.
Discover the significance of the current economic landscape, characterized by a $314 billion deficit. Amid uncertainties regarding governmental intervention and its ability to address this deficit, discerning individuals are urged to consider the immanent risk. Now, more than ever, there is a pressing need for Americans to recognize the vulnerabilities within the existing financial system.
In response to this dynamic shift, it is prudent to explore strategic portfolio diversification, incorporating assets that serve as a hedge for your financial future. Reagan Gold Group specialists are standing by to guide you with your purchase of precious metals such as gold and silver. Contact Reagan Gold Group before these metals skyrocket in price due to the current US inflationary state. Book a FREE consultation , re-evaluate your portfolio, and consider a share of gold as a measure to secure your assets and hedge against unexpected financial unrest.
Contact us to learn how you can “recession-proof” your retirement & unlock massive hedging opportunities.
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