The federal budget

Where the money comes from, and where it goes.

The federal government's fiscal year runs October to September. In fiscal 2026, which just ended, it took in $5.40 trillion and spent $7.40 trillion. The difference, $1.99 trillion, was borrowed. That's 27¢ of every dollar it spent. Here's where it all went, where your own taxes fit in, and how the debt got to where it is. Every number comes from the Treasury, the Congressional Budget Office or the Federal Reserve, and the sources are at the bottom.

1One year, in round numbers

Took in$5.40 trilliontaxes and other receipts

Spent$7.40 trillion23% of everything the economy made

Borrowed$1.99 trillion27¢ of every dollar spent

Owed$32.4 trillion102% of a year's economy

Where the money came from

Where it went

Fiscal 2026, October 2025 to September 2026, in billions. "Everything else" includes science and space, farming, natural resources, foreign aid, housing and the running of government, minus some money agencies collect (like offshore oil royalties and agencies' own contributions to employee retirement), which the Treasury counts as negative spending.

2Where your taxes go

By law, the money doesn't all go into one pot. Social Security and Medicare taxes from your paycheck go into their own trust funds and pay benefits. Income taxes, and most other taxes, go into the general fund, which pays for everything else, plus whatever Social Security and Medicare benefits their own taxes don't cover.

3How the debt got here

The debt is the sum of every year's borrowing, less any years of paying it down. What matters most is how big it is next to the economy that supports it, so it's shown here as a share of GDP, everything the country makes in a year. It peaked at 106% after World War II, fell for three decades as the economy outgrew it, and has risen since 2008. The dashed line is where the Congressional Budget Office projects it goes if today's laws stay as they are.

Taxes and spending, as a share of the economy

The gap between the lines is each year's deficit.

4Do deficits line up with the economy?

Each year the government runs a surplus (above zero) or a deficit (below). Put something else next to it and see how closely the two move together. Slide the gap to compare each year's budget with what happened one to three years later.

Correlation runs from 1 (always move the same way) through 0 (no relationship) to −1 (always move opposite ways). Two things moving together doesn't show that one causes the other: often both respond to something else, like a recession. The budget is by fiscal year (October to September); the rest are calendar-year figures.

5Interest on the debt

In 2026 the government paid $1.05 trillion in interest, more than it spent on defense ($0.97 trillion). The debt costs more as it grows, and more again when interest rates rise. The Treasury is paying an average of 3.5% on what it owes today. Slide the rate to see what the same debt would cost.

Rates don't change all at once: the Treasury has bills that come due within a year and bonds that run up to 30 years, so a change in rates reaches the whole debt over several years as old debt is paid off with new.

Your turn

Every way out of deficits means taking in more, spending less, or growing faster than the debt. Try your own mix of taxes and spending, and see what it does to the debt over the next 30 years: balance the budget →

Then take it to the people who decide: what's on your ballot, and what to ask →

Sources

Fiscal 2026: the Treasury's Monthly Treasury Statement for September 2026: receipts by source and outlays by budget function (Table 9), and payroll taxes by trust fund (Table 4).
Debt and interest rate: debt held by the public on September 30, 2026, from Debt to the Penny, and the average rate on marketable debt from Average Interest Rates on U.S. Treasury Securities. "Debt" here means debt held by the public, not the larger total that includes what the government owes its own trust funds.
History, 1940 to 2025: the Office of Management and Budget's Historical Tables, via FRED: receipts, outlays, debt held by the public and interest, each as a share of GDP. 2026 uses the Treasury's numbers above and CBO's estimate of 2026 GDP.
Projections: the Congressional Budget Office, The Budget and Economic Outlook: 2026 to 2036 (February 2026), through 2036, and The Long-Term Budget Outlook Data: 2026 to 2056 after that. These assume today's laws stay as they are, and were made before the Supreme Court's February 2026 ruling on tariffs, so they count on more tariff revenue than is now coming in.
The economy: inflation (CPI-U, December to December), economic growth (real GDP) and money supply growth (M2) are the same figures as on the money page. Unemployment (UNRATE), the 10-year Treasury rate (GS10) and the federal funds rate (FEDFUNDS) are yearly averages, from FRED.
Data as of October 2026.

For education only, not investment, tax or legal advice. Projections are not predictions.