The Daily

The Problem With a $2 Trillion Deficit

Oct 23, 2023

Jim Tankersley, an economic policy correspondent for The New York Times, delves into the alarming rise of the U.S. federal deficit, now nearing $2 trillion. He discusses how this deficit contradicts the ongoing economic growth, highlighting the negative feedback loop created by rising borrowing costs. Tankersley contrasts Republican and Democratic approaches to managing the deficit and emphasizes the complexities of government budgeting amidst rising interest rates. The conversation offers insight into the challenging choices lawmakers face in addressing these pressing fiscal issues.

25:14

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Jim Tankersley

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Quick takeaways

The US government's federal deficit has doubled to nearly $2 trillion over the past year, causing concern about the country's ability to borrow money and cover the shortfall, leading to increased borrowing costs.

A significant drop in tax revenue, particularly due to factors such as capital gains taxes and lower tariff revenue, is the major reason for the substantial increase in the federal deficit.

Deep dives

The Growing Deficit: Doubling to $2 Trillion

The podcast episode highlights the US government's report that the federal deficit doubled to nearly $2 trillion over the past year. This massive deficit, which is twice the size of the previous year's deficit, is a cause for concern, as it is unusual for deficits to increase during a period of economic growth. The episode explores the implications of such a large deficit and how it is impacting the country's ability to borrow money to cover the shortfall, leading to increased borrowing costs. These growing borrowing costs could create a problematic cycle where more borrowing is needed to pay off the interest, further exacerbating the deficit. The episode emphasizes the need for policymakers to address the deficit issue and make tough choices regarding taxation and spending to avoid spiraling into a deeper fiscal crisis.

Republican Concerns over Deficits and Spending

01:11

The Economic Theory Behind Clinton's Efforts

00:51

Why We Should Care About the $2 Trillion Deficit

01:24

Intro

2min

Deficit Dynamics in a Growing Economy

6min

The Impact of National Debt and Rising Interest Rates

3min

Navigating America's Fiscal Deficit

12min

The Interplay of Political and Fiscal Dysfunction

4min

Over a year, the federal deficit — the gap between what the U.S. government spends and what it earns — has doubled, to nearly $2 trillion.

That figure seems to validate the worries of congressional Republicans about government spending, which have been at the center of the messy fight over who should be House speaker.

Jim Tankersley, who covers economic policy at the White House for The Times, explains the Republicans’ concerns — and why their plans would not come close to solving the problem.

Guest: Jim Tankersley, an economic policy correspondent for The New York Times.

Background reading:

The U.S. deficit effectively doubled in 2023.
This is why the federal deficit is growing.

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The Daily

The Problem With a $2 Trillion Deficit

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

The Growing Deficit: Doubling to $2 Trillion

Tax Revenue Drop: The Main Cause of the Deficit

The Impact of High Borrowing Costs on the Deficit

Republican Concerns over Deficits and Spending

The Economic Theory Behind Clinton's Efforts

Why We Should Care About the $2 Trillion Deficit

Remember Everything You Learn from Podcasts