How the Federal Budget Deficit Doubled in a Single Year

September 21, 2023

It’s not the first time that has happened, but there are key differences about what happened this year.

by Eric Boehm Reason.com

It’s not totally unprecedented to see the federal budget deficit double from one year to the next, as it seems to have done this year.

But those occasions, at least in the past 50 years, have always corresponded with bad stuff happening to the national economy. Deficits surged in the late 1970s and early 1980s thanks to high inflation and a series of recessions. The budget deficit doubled between 2002 and 2003 thanks to a recession and as the War on Terror kicked off. And it skyrocketed again during the crises that bookended the 2010s: the mortgage crisis and the COVID-19 pandemic.

This year will likely be added to that list. The Congressional Budget Office last week projected that the federal government will post a deficit of $2 trillion when the current fiscal year ends on September 30.