Federal Deficit Totaled $666 Billion in Fiscal Year 2017
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What’s the story?
The Treasury Department announced Friday that for the 2017 fiscal year, the federal government ran a $666 billion deficit. Last fiscal year’s deficit is the sixth largest in U.S. history and was about $80 billion larger than 2016’s $585 billion deficit, although it could’ve been worse — the Congressional Budget Office (CBO) had projected 2017’s deficit to total $693 billion as of late June.
Treasury Secretary Steven Mnuchin said of the deficit:
"Today's budget results underscore the importance of achieving robust and sustained economic growth. Through a combination of tax reform and regulatory relief, this country can return to higher levels of GDP growth, helping to erase our fiscal deficit."
Why does it matter?
The federal government hasn’t had a balanced budget since the 2001 fiscal year, and the national debt now exceeds $20 trillion for the first time in American history — an amount rivalling the size of the U.S. economy.
Excessive debt can cause a debt spiral, in which bond markets lose confidence in a government’s ability to repay its debt and charge higher interest rates on that debt, thereby worsening the government’s problem as it becomes more costly to service its debt.
Servicing the national debt is becoming an increasingly costly endeavor for the federal government. In 2016, interest payments on the national debt totalled $241 billion, and while the total for fiscal year 2017 isn’t immediately available the CBO projected that figure to rise by 12 percent from 2016 — which would put the total at $270 billion.
What do you think?
Does more need to be done to rein in deficits and reduce the national debt? Are deficits acceptable as long as the spending goes to important government functions? Use the Take Action button to tell your reps and share your thoughts in the comments below.
— Eric Revell
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(Photo Credit: zimmytws / iStock)
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