The Return of Trillion Dollar Deficits

The end of the U.S. government’s 2018 fiscal year on September 30, 2018, was accompanied by a grim milestone for the U.S. national debt: the return of trillion dollar deficits.

As of September 28, 2018, the last business day of the fiscal year, the total public debt outstanding of the U.S. government stood at $21.516 trillion, an increase of $1.271 trillion over the level of $20.245 trillion, where it stood on September 29, 2017, the last business day of the government’s 2017 fiscal year.

Terence P. Jeffrey, who covers the national debt beat for CNSNews, puts the latest single-year trillion dollar increase in the national debt into perspective:

The $1,271,158,167,126.72 in debt accumulated in fiscal 2018 made fiscal 2018 the eighth fiscal year in the last eleven in which the debt increased by at least one trillion dollars.

The $1,271,158,167,126.72 increase in the federal debt was also the sixth largest fiscal-year debt increase in the history of the United States.

The United States saw its greatest fiscal-year increase in the federal debt in fiscal 2009, which began on Oct. 1, 2008 and ended on Sept. 30, 2009.

That year the debt increased by $1,885,104,106,599.26 in 2009 dollars–or approximately $2,200,878,170,000.00 in constant August 2018 dollars (adjusted using the Bureau of Labor Statistics inflation calculator).

According to the Bureau of Labor Statistics, there were 155,542,000 people with jobs in the United States in August. That means that the $21,516,058,183,180.23 in federal debt at the end of fiscal 2018 equaled approximately $138,330 for every person in this country who works. The $1,271,158,167,126.72 increase in the debt in fiscal 2018 alone equaled approximately $8,172 per worker.

Not all of 2018’s trillion+ dollar increase in the national debt is attributable to the U.S. government spending more than it collects in taxes during the year. Through the first 11 months of the government’s fiscal year, about 10-11% of the increase in the national debt was contributed by additional borrowing to fund the Federal Direct Student Loan program, where the U.S. government has cumulatively borrowed over $1.1 trillion since taking over the student loan industry from the private sector in 2010.

As of August 2018, over $1.2 trillion of the national debt was borrowed to fund this money-losing venture. The data for the total amount borrowed to support the government’s student loan program during the 2018 fiscal year will become available later this month.

Craig Eyermann is a Research Fellow at the Independent Institute.
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