The results are in, and it doesn’t look good. Yesterday, the Congressional Budget Office (CBO) released a report on the Fiscal Year 2017 budget deficit (fiscal years end on Sept. 30th). The final tally was an ominous $666 billion deficit – a shortfall that will add to our $20 trillion national debt. Reminder: The deficit is the shortfall over a one-year time period, the debt is the total of all of the annual deficits.
Here are six things you need to know about the $666 billion deficit:
1.The Fiscal Year 2017 deficit was the sixth largest in American history – only ranking behind the five years during and following the Great Recession. Unless Congress gets to work, it is only set to get worse. CBO projects that our deficits will continue to rise, reaching $1 trillion by 2022 and nearing $1.5 trillion in 10 years.
2. Last year’s deficit was massive despite the federal government collecting the most revenue in American history – up 1% or $48 billion from than last year. The problem is that we also spent the most in American history – increasing spending by 4.4% or $139 billion. Yes, our economy is growing – but unfortunately not as quickly as our debt. That means our debt-to-GDP ratio is rising to levels not seen since World War II.
3. We added more to the national debt last year than the accumulation of all the debts combined in the first 187 years of our history! In one year we outdid a timespan that covered 38 presidents.
4. Last year’s deficit could buy every single American two new IPhone Xs at $1000 a pop. Maybe we can get a bulk purchase discount?
5. The next generation will be hurt the most by these continued deficits. Interest payments on the debt is projected to be the fastest growing spending category. In seven years, more millennials’ tax dollars will be going towards paying interest on the debt than on all federal investments combined. In ten years, more tax dollars will go to interest payments than on defense.
6. Congress’s response to the towering deficit…close eyes, plug ears and keep adding to the debt. This is a real problem and we need real solutions – like going after billions in improper payments, eliminating low-priority programs, and reforming our entitlement programs. The next generation depends on Washington getting its act together now.