Soaring U.S. Budget Deficit: A Fiscal Challenge Unveiled

The U.S. Treasury has reported a significant shift in the federal budget, with a $380 billion deficit in August 2024, contrasting starkly with an $89 billion surplus in August 2023. The first 11 months of the 2024 fiscal year have seen a 24% increase in the deficit, topping $1.897 trillion, largely due to high interest costs on public debt.

The U.S. Treasury announced on Thursday a startling $380 billion federal budget deficit for August, a dramatic contrast to the $89 billion surplus recorded in the same month of 2023. This shift is primarily attributed to the reversal of President Joe Biden's student loan forgiveness program.

Over the first 11 months of the 2024 fiscal year, the deficit has soared to $1.897 trillion, marking a 24% increase from the $1.525 trillion gap during the same period last year. This surge is notably due to soaring interest costs on public debt, which have exceeded $1 trillion for the first time, according to a Treasury official.

This growing deficit underscores the challenges facing U.S. fiscal policy, as rising debt costs continue to strain the federal budget.

(With inputs from agencies.)