Clos­ing the 2016 books

Daily Freeman (Kingston, NY) - - BUSINESS -

The fed­eral gov­ern­ment has closed the books on the 2016 bud­get year, and the news isn’t good. The deficit rose sharply to $587.4 bil­lion. That’s one-third higher than the $439.1 bil­lion deficit in 2015.

Gov­ern­ment re­ceipts were up a mod­est 0.6 per­cent, but spend­ing jumped a much sharper 4.5 per­cent. Weaker-than-ex­pected eco­nomic growth led to lower tax rev­enues, while spend­ing for such pro­grams as Medi­care and the money bor­rowed from the So­cial Se­cu­rity Trust Fund rose.

At the start of the Obama ad­min­is­tra­tion, there were four straight years of $1 tril­lion-plus deficits linked to ef­forts to com­bat the Great Re­ces­sion. But since then, the deficit had been fall­ing as the econ­omy re­cov­ered. From a high of 9.8 per­cent of the to­tal econ­omy in 2009, the deficit dropped to 2.5 per­cent of GDP in 2015. The deficit rose to 3.2 per­cent of GDP in 2016.

The Con­gres­sional Bud­get Of­fice is pro­ject­ing the deficit will keep ris­ing over the next decade, top­ping $1 tril­lion again by 2024, when it will rep­re­sent 4 per­cent of GDP. Here is a look at bud­get com­po­nents in 2015 and 2016:

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