The US economy is flourishing despite a projected $2 trillion federal deficit.
US Budget Deficit Hits $2 Trillion as Economy Thrives Amid Record Immigration and High Inflation
The Congressional Budget Office (CBO) has projected a staggering $2 trillion federal budget deficit this year, partly due to President Biden’s significant student loan forgiveness plans, according to the report of Washington Times.
Despite the deficit, the U.S. economy is thriving boosted by record levels of immigration. However, inflation remains high offsetting some economic gains.
In the last four months, the CBO increased its deficit estimate by $400 billion. This is due to increased war spending higher Medicaid costs and substantial student loan debt forgiveness by the Biden administration.
Federal debt held by the public is expected to reach 99% of GDP this year and could surpass 120% within a decade in a concerning development highlighted by CBO Director Phillip L. Swagel.
(photo: Center for Immigration Studies)
CBO Projects Modest 2% Economic Growth Amid Record Immigration, High Inflation, and Fiscal Challenges
The CBO forecasts modest economic growth of 2% this year, down from previous years but still resilient largely due to increased immigration since 2021.
While immigration boosts GDP and tax revenues, it also contributes to higher inflation and necessitates increased government spending on interest payments for the national debt.
Overall, while the economy shows strength in growth and employment, record deficits and mounting debt pose significant challenges and are likely to be key issues in upcoming political debates.
