As measured by gross domestic product (GDP), federal debt increased more than twice as much as economic growth in the fourth quarter of 2023.
Real GDP in the fourth quarter of 2023 showed above-trend growth, increasing 3.3% year-over-year and adding $328.7 billion to the U.S. economy. according to to the Bureau of Economic Analysis (BEA). In contrast, the federal government held Debt stood at nearly $33.17 trillion at the end of the third quarter of 2023, but by the end of the year it had jumped to just over $34 trillion, representing an increase in deficits of more than $800 billion in the fourth quarter. Masu. according to to the Ministry of Finance. (Related article: Small banks' profits slump as customers flee to megabanks due to high interest rates and industry turmoil)
E. J. Antoni, a fellow at the Heritage Foundation's Grover M. Herman Center on the Federal Budget, told the Daily Caller News, “What we are effectively doing at the national level is increasing debt faster than incomes are increasing.'' It's about increasing it.” Foundation. “At the same time, the cost of servicing each dollar of debt is rising. This is a deadly combination because it leads to a death spiral of debt.” This GDP report shows that for the first time in history, annualized interest on debt has risen to 1 trillion yen. The runaway growth in government spending is even worse because government spending is so inefficient that while runaway consumer spending is also not sustainable, the runaway growth in government spending is even worse. There will be less profit commensurate with expenses. ”
The federal government spent $659 billion in national debt service alone in fiscal year 2023, an increase of $184 billion from the previous year. according to to the Congressional Budget Office. According to the Committee for a Responsible Federal Budget, the national debt is estimated to cost more than $13 trillion in interest over the next 10 years.
The federal debt has ballooned over the past seven years, increasing by more than $8 trillion under the Trump administration on the back of emergency spending for the coronavirus pandemic, and already $6 trillion under President Joe Biden, according to the Treasury Department. This has increased by more than 20%. Despite large budget deficits, the American Enterprise Institute estimates that the government still has about $93 trillion in unfunded debt for programs like Medicare and Social Security.
Government consumption spending and gross investment accounted for about 17% of overall economic growth in the fourth quarter, below the annual average of 27.2%, according to the BEA. Government consumption in the fourth quarter increased 3.3% year over year, driven by federal nondefense spending, which increased 4.6% year over year.
Comparing debt and GDP, the relationship between stocks and flows is, in a sense, like apples and oranges. What matters is interest on income, which is rapidly increasing at the fastest pace since 1946, just after World War II. Even in the optimistic case, if the rate of increase slows, by 2030 the previous % record will be double his. pic.twitter.com/oWFYOCO5QO
— Dr. EJ Antoni (@RealEJAntoni) January 25, 2024
According to BEA, the biggest contributor to growth in the fourth quarter was consumer spending, which rose 2.8% year-on-year and contributed 58% to overall GDP growth.
Robust consumer spending is occurring in tandem with increases in personal debt and lending by Americans, with total credit card debt among Americans to exceed $1 trillion for the first time in history by 2023. American consumers are also turning to services like Buy Now and Pay Now. As prices and expenses rise, you put it aside to finance a purchase later.
“It is very concerning that government spending growth has outpaced consumer spending growth for the past six quarters,” Antoni told DCNF. “Furthermore, government spending only includes what the government purchases directly and does not include all remittances. Therefore, how much of today's economy is directly or indirectly controlled by the government? So that's a real understatement…this debt-fueled extravagance won't last forever.”
The White House did not immediately respond to a request for comment from DCNF.
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