Debt and Deficits
The U.S. government has been spending more money than it receives in taxes, running deficits in all but four years since 1970. The federal debt, which is the accumulation of these deficits over time, reached over $31 trillion in October 2022.
While high debt levels pose a range of risks, in times of economic distress, rising deficits might be needed to buffer the economy. In this episode of EconoFact Explains, we look at the sources of government debt – both structural and cyclical, and discuss the effects debt can have in the short and long run.