I’m seeing news stories about how the US deficit was reduced by half down to $1.4 Trillion within the last year. How is this possible to move this fast? Does the current government have anything to do with it or is it all external factors?
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“Cutting the deficit in half” in this case is misleading. But it isn’t just a current administration misnomer. It’s a journalistic issue.
The phrase should be “cutting the yearly deficit spending in half”. But again that takes up too much headline space.
What happened here is the government is deficit spending and borrowing half what it did last year.
Since the Clinton administration, deficit spending has floated around $1T a year. Meaning the US government borrows and spends $1T more than it takes in thru taxes. So last year (July 2021-June 2022) the federal government overspent roughly half what was spent (July 2020 – June 2021). It went from a $1.4T down to around $800B. This could be a result of better fiscal stewardship and policies of the Biden Administration, this could be the reduced spending on Covid related programs, this could be the sunsetting of some of the ‘17 tax cuts, the validity and weight of those reasons will be influenced by personal politics and viewpoints.
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