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March 11, 2021

The gap between government spending and revenue rose to more than $1 trillion in the first five months of the 2021 fiscal year, the Treasury Department said in a Wednesday budget report, marking an increase of roughly 68% compared to the same period last year.

Last year, the budget deficit totaled $3.1 trillion–nearly $2 trillion more than originally forecast and triple the deficit in 2019 as the pandemic forced legislators to shore up relief funds to prevent an economic collapse.

 

President Joe Biden is set to sign his $1.9 trillion stimulus plan on Friday, a move that's sure to kick spending–and borrowing–into overdrive after $5 trillion in stimulus spending last year helped tack on nearly $6 trillion to the nation's federal debt. 

In February, the Congressional Budget Office projected that even without additional fiscal stimulus, the federal budget deficit would be $2.3 trillion in fiscal 2021, noting that the deficit has widened "significantly" as a result of stimulus legislation.

The U.S. budget deficit is often viewed as a measure of government efficiency, and naturally, of government spending. A larger deficit typically means the government is taking on more debt, which can ultimately limit the government's willingness–and ability–to increase spending in order to curb economic downturns, or fight pandemics, notes David Wessell, the director of The Hutchins Center on Fiscal and Monetary Policy at the Brookings Institute. The U.S. government has been operating on a budget deficit since 2002. The last budget surplus, in 2001, was $127 billion. 

$35 trillion. That's how much CBO projected in February the nation's debt will swell to by the end of this year–before adjusting for fiscal stimulus. As of Wednesday, the national debt stands at $28 trillion.

More stimulus. "Democrats are pivoting to their infrastructure plan, which reports suggest could be worth up to $4 trillion over 10 years, but this will have a much harder time getting through Congress as resistance builds to deficit-busting bills," Vital Knowledge Media Founder Adam Crisafulli said Wednesday.