Federal Deficit Projected to Double This Year

The federal deficit is set to nearly double this year, reaching $2 trillion, compared to last year’s $1 trillion. This unprecedented level of deficits, not tied to war or crisis, is concerning. The massive spending imbalance contributes to higher interest rates, impacting consumers and mortgages. In the long term, these interest costs will strain federal priorities. Despite strong economic growth, bigger interest payments and lower tax receipts persist, defying the usual deficit reduction trend. The annual deficit was even larger in 2021, hitting $2.8 trillion due to extensive COVID-related spending.