Fiscal 2020 Deficit Through June

The chart below compares the U.S. fiscal 2020 deficit by month with Fiscal 2019. The federal government’s response to the COVID-19 pandemic has had a profound impact on the federal deficit.

The deficit cumulative deficit through June was in excess of $2.7 trillion, This is $2 trillion more than the cumulative deficit through June 2019. The deficit for the month of June was estimated to be $683 billion. That means the U.S. government was overspending by nearly $23 billion per day.

The spending may be fully justified in response to the global health crisis and prevent the U.S. from falling into another Great Depression. However, it remains to be seen how long the U.S. can continue to overspend by $23 billion per day without other short-term or long-term repercussions.

Fiscal 2020 Deficit Through January

The graph below compares the U.S. federal deficit by month to the prior fiscal year. Through the first four months of Fiscal 2020, the U.S. deficit was $388 billion, which is $78 billion more than Fiscal 2019.

The deficit for January 2020 increased by $55 billion due to February payments that were made in January. It was a timing shift that occurred because February 1 was a Saturday. A similar timing shift will occur in February, since March 1 will fall on Sunday. These timing shifts will equalize by the end of March, which is halfway through the fiscal year.

Excluding the $55 billion timing shift, the Fiscal 2020 deficit is approximately 7.5% higher than last year. Based on current projections, the U.S. deficit will exceed $1 trillion, which hasn’t happened since 2012.

National Debt Exceeds $23 Trillion

Last week, the U.S. national debt crested $23 trillion. With all of the political drama surrounding the impeachment of President Trump, this milestone received scant media coverage. The lack of attention to the issue by the media doesn’t lessen the gravity of the national debt. The deficit for next year is expected to exceed $1 trillion, so the national debt will bypass $24 trillion by the end of next year.

Sadly, Congress, the President and most politicians seem to have little interest in eliminating the annual overspending and reducing the debt. It seems like the exact opposite is happening for the 2020 campaign season. Candidates are proposing more government spending, with few details of how to pay for their new plans. The result will be more deficit spending.

Are you satisfied with the way Congress, the President and our political leaders are addressing our $23 trillion debt?