Washington: The US government budget deficit is estimated to reach a record $ 3,300 billion. The budget deficit is expected to hit a record high, given the ongoing expenditure on measures to deal with covid-19 and stimulus measures of more than $ 2,000 billion to boost the economy.
The Congress Budget Office has made this estimate. The deficit increase means that federal debt will surpass GDP annually next year. This situation will be exactly the same as it was after World War Two. At that time the cumulative debt exceeded the size of the economy.
The $ 3,300 billion estimate released on Wednesday is more than three times the 2019 deficit. At the same time, the rate of softening in 2008-09 is twice. On one hand, while the government’s expenses are increasing, on the other hand the tax revenue has come down due to the recession. Personal income tax collections are down 11 percent over the previous year, while company tax collections are running 34 percent less.
The economy was shut down to prevent the corona virus. This had an impact on the economy and employment of the people. Direct relief and incentive measures of $ 1,200 were announced to give relief to those who lost their jobs. This brought relief to the economy in the short run.
