Macro Hive Conversations With Bilal Hafeez
Marc Goldwein on the Unprecedented US Budget Problem and How to Fix It
Nov 10, 2023
Marc Goldwein, Senior Vice President and Senior Policy Director for the Committee for a Responsible Federal Budget, discusses the scale of US debt and deficit, the impact of COVID on spending, trends in healthcare, social security spending, taxes, and more.
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Quick takeaways
- The US budget deficit is at an unprecedented level, with deficits projected to remain over $2 trillion a year in the next decade, posing significant risks to the economy.
- Addressing the budget deficit requires comprehensive solutions, including reducing healthcare costs, reforming social security, implementing long-term caps on discretionary spending, and generating additional tax revenue through reform.
Deep dives
The Urgent Need to Address the Budget Deficit
The budget deficit in the US is a major concern, with last year's deficit standing at $2 trillion, twice as high as the previous year. The gap between spending and revenue is the primary cause, with spending at around $6.5 trillion and revenue at around $4.5 trillion. The revenue is relatively low, below the historic average, while spending on major health and retirement programs, interest costs, and defense and non-defense discretionary parts of the budget continue to rise. The deficit as a share of GDP is about 7.5%, an unprecedented level during peacetime. Projections suggest that deficits will remain over $2 trillion a year in the next decade, with increasing debt and interest costs becoming a future threat.
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