State of the union's wallet
Last night, President Biden held the annual State of the Union, addressing the country on what is often dubbed the biggest night of the year in Washington. A big theme from the 72-minute speech, Biden’s longest of his presidency so far, was the economy. After touting the low rate of unemployment, the 46th president threatened to veto any proposal that would cut spending on Social Security and Medicare while also imploring Congress to raise the debt ceiling.
I O U $1.4 trillion
We’ve visualized the latest budget from the US Treasury, which reveals that in fiscal year 2022, the federal government collected nearly $5tn in revenue, with more than 50% of that coming from individual income taxes. However, the US government spent even more, leading to a nearly $1.4tn deficit. That’s a hard-to-comprehend-number, but is substantially lower than the $3tn+ deficit recorded in 2020 during the depths of the pandemic.
To make up the difference the US government does what everyone who overspends their budget does — they borrow. This then adds to its already enormous tab (AKA the national debt), which currently sits at the $31.4tn debt ceiling limit, a topic which received a fair amount of audience participation when brought up in Biden’s speech.
With a debt pile that big, the interest payments aren’t small. Indeed, last year the US government spent ~$480bn on net interest payments, just shy of Ireland, Norway or Nigeria’s annual GDP.
