Get NY Times Deficit Graphic 2010-2024

The national debt enables the federal government to pay for important programs and services even if it does not have funds immediately available, often due to a decrease in revenue. Decreases in federal revenue coupled with increased government spending further increases the deficit.

It's complicated. In the short run, the deficit picture has suddenly become much worse. But the causes of that deterioration may — may — be temporary. At the same time, there has been very good news on health care costs, one of the main drivers of long-run budget concerns.

“Rising deficits and debt are an economic and a national security concern.” Deficits have been exacerbated this year because of many factors, including delays in collecting tax revenue as a result of extreme weather and the unexpectedly high costs of certain federal programs.

The Causes of Deficits and Surpluses Simply put, when the country's people and businesses are making less money, the amount collected by the government also decreases. Similarly, when the economy is doing well and people and businesses are earning more money, the government collects more.

In FY 2023 total government spending was $6.13 trillion and total revenue was $4.44 trillion, resulting in a deficit of $1.70 trillion, an increase of $320 billion from the previous fiscal year.

As can be seen in the table below, the main cause of the increase in the deficit is lower revenues in FY 2023 compared to FY 2022. Non-interest outlays (excluding the effects of student loan forgiveness) have been, on net, unchanged as a share of GDP, while interest costs have increased.

In our news wrap Saturday, new numbers from the U.S. Treasury Department showed the nation's deficit has increased nearly 25 percent to $1.7 trillion in the last fiscal year, and at least four people have died in the torrential storm hitting parts of Europe for a third day.

The increase is largely the product of the Federal Reserve's aggressive raising of interest rates in a bid to tame inflation. Federal borrowing costs have climbed in recent weeks and stoked new concerns about interest payments — and larger deficits — in the years to come.