Balancing the U.S. Budget
In 2024, the U.S. government spent $6.7 trillion while generating $4.92 trillion in revenue, leaving a $1.83 trillion deficit, funded through borrowing.
Amid political turmoil in Washington, Elon Musk has been given a key role in efforts to reduce the deficit—a major challenge President Trump has taken on. However, resistance from federal agencies, which control spending, makes the task even harder. Interest payments alone cost $726 billion annually, with total federal debt reaching $33.1 trillion by the end of 2023.
To address this, the administration is focusing on tariffs, reducing trade deficits, cutting NATO costs, winding down wars, and slashing wasteful spending. While these measures aim to close the budget gap, reducing reliance on Chinese imports remains difficult. Any aggressive action risks fuelling inflation, forcing a slower approach.
How far will Trump succeed? That remains to be seen.