The Alarming Surge of America's Federal Deficit

The federal budget deficit in the US has unexpectedly doubled to around $2 trillion, despite a stronger-than-expected economy. While the Biden administration blames Republican tax cuts for shrinking revenue, the deficit increase is also attributed to slumping tax revenue unrelated to the tax cuts. Federal spending did not contribute to the increase, as it actually fell slightly. Factors such as pandemic-era tax credits, delayed tax-filing deadlines, decreased customs duties, and volatile capital gains taxes all played a role in the decline in tax receipts. Additionally, the government spent a significant amount on interest payments on the national debt, largely due to the Federal Reserve's aggressive interest rate hikes.