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The total US budget deficit exceeded US GDP in the second quarter
In the United States, the federal budget posted a record deficit of $ 3.1 trillion at the end of the past fiscal year, according to data released by the Treasury.
The current deficit has reached double the previous record deficit recorded during the global financial crisis some ten years ago.
The large gap between federal government revenues and expenditures in the United States is likely to come as a result of the financial rescue package for the economy from the Corona virus, which included the spending of huge funds to help businesses and companies. unemployed before the deterioration that befell the US economy.
The budget deficit increased by about 218 percent in the fiscal year that ended last September, indicating a weak record for the US budget deficit in 2009, which indicated $ 1.4 trillion.
Public spending increased while state tax revenues decreased due to the closure of a large number of businesses affected by the epidemic.
The US Department of the Treasury confirmed that the total US budget deficit increased to $ 26.9 trillion, which exceeds the value of US gross domestic product, which fell in the second quarter of this year to $ 20 billion.
And federal government spending in the fiscal year that ended at the end of last month fell 47 percent, while total spending fell 1.00 percent.
However, the near-zero interest rate in the United States helped match the current picture of financial conditions, as these zero rates reduced interest payments by 0.9 percent, or $ 50 billion, during the year. tax finalized.
The financial gap in the federal budget has widened since President Donald Trump became president of the United States, as the budget deficit crossed the $ 1 trillion mark this year even before the spread of the Corona virus, for the first time. time since 2012.
The tax cut stipulated by the US tax cut and the employment law passed by the US Congress in 2017 is likely to be behind the decline in tax revenue in exchange for higher government spending , leading to a growing budget deficit.
Improving Trump’s image
US administration officials are trying to exploit the large increase in the budget deficit in favor of the president of the United States, as they suggested that these financial deficit indices occurred as a result of the president’s rapid move to tap into the economic resources of the country to ease the economic damage to American businesses and families as a result of the spread of the epidemic.
“Under the leadership of President Trump, the US economy has made an amazing comeback,” said Stephen Mnuchin, US Secretary of the Treasury, and Russell Foot, director of the White House Budget Office, in a joint statement.
“The administration remains fully committed to supporting American jobs, families and businesses, and ensuring the continued recovery of the economy,” added Mnuchin.
The team of US President Donald Trump has been in talks with leaders of the Democratic Party for many weeks to reach an agreement on the value of the second financial rescue package for the US economy, which will be added to the first stimulus package. , which amounted to about $ 3 trillion, including $ 2.2 trillion under the Cares Act. Which was approved by the United States Congress last March to support the economy in the face of the epidemic.
But officials on both sides believe it will be difficult to reach an agreement on the second stimulus package before the 2020 US presidential elections, which are scheduled for November 3.
The Trump administration has not reached an agreement with the US Congress on the second stimulus package for the economy in the face of the Corona virus, amid calls from a large number of US senators to reduce financial support as part of another package of financial rescue.
