US BUDGET DEFICIT TO SOAR PAST $3.3T
The US federal budget deficit is projected to hit a record $3.3 trillion as huge government expenditures to fight the coronavirus and to prop up the economy have added more than $2 trillion to the federal ledger, the Congressional Budget Office said.
The spike in the deficit means that federal debt will exceed annual gross domestic product (GDP) next year — a milestone that would put the US where it was in the aftermath of World War II, when accumulated debt exceeded the size of the economy, Andrew Taylor wrote for the Associated Press (AP) late on September 3, 2020.
The $3.3 trillion figure released Wednesday is more than triple the 2019 shortfall and more than double the levels experienced after the market meltdown and Great Recession of 2008-09. Government spending, fueled by four coronavirus response measures, would register at $6.6 trillion, $2 trillion-plus more than 2019. The recession has caused a drop in tax revenues have fallen, but the changes are not as dramatic as seen on the spending side, with individual income tax collections running 11% behind last year. Corporate tax collections are down 34%.
The economy shut down in the spring so people could be in isolation in a failed national attempt to defeat the pandemic. That shutdown led lawmakers and President Donald Trump to pump money into business subsidies, larger unemployment benefits, $1,200 direct payments and other stimulus steps that have helped the economy in the short term.