COVID-19 Shatters US Budget Deficit To All-Time High

The US budget deficit hit a record high in 2020 to exceed $ 3 trillion, driven by federal spending in the face of the unprecedented economic crisis caused by COVID-19.

The federal state deficit for the 2020 fiscal year ended in September reached $ 3.132 billion, up from $ 984 billion in 2019, according to data released Friday by the US Treasury. The increase in spending, but also the fall in revenue, especially in taxes collected, caused the budget deficit to jump by 218% compared to 2019.

This is the largest deficit ever recorded by the United States, more than double the previous record, recorded in 2009, when, in the midst of a recession linked to the financial crisis, it had climbed to 1.4 trillion dollars.

Revenue was $ 3.420 billion, less than expected. In fact, the abrupt end to economic activity from March in an attempt to stop the spread of COVID-19 caused the income of households and businesses to fall, which therefore paid less taxes than expected. to the federal state.

But the deficit is mainly due to the explosion of public spending, which has “considerably increased”, underlines the Treasury in its press release. They jumped 47% to reach $ 6,500 billion.

Direct check to the Americans, additional aid for the unemployed, extension of unemployment rights to the self-employed in particular, loans to small and medium-sized businesses …: the recovery plan adopted at the end of March by the White House and Congress provided for 2200 billion euros dollars of aid measures for Americans and businesses in particular. It had been extended by 500 billion in April.

About Victoria Smith

Victoria Smith who hails from Toronto, Canada currently runs this news portofolio who completed Masters in Political science from University of Toronto. She started her career with BBC then relocated to TorontoStar as senior political reporter. She is caring and hardworking.

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