Gediminas Jasionis

U.S. federal budget deficit reaches $1.1 trillion during lagging economy period

by Gediminas Jasionis July 14, 2009
US government policyHelping banks and other large companies, the US has spent billions, thus increasing the Federal Budget Deficit. The latest Treasury report announced on Monday indicates the deficit has reached $1.1 trillion.

In June alone the deficit increased by $94.3 billion. For the beginning of fiscal 2010 the government projects a $1.26 trillion budget deficit. For July's period last year, the deficit was only $285.8 billion.

The increasing deficit is not the only problem at hand. The first US stimulus package prevented the U.S. economy from completely failing, but it didn't manage to get it back on track either. Speculations of the possibility of a second stimulus round have already surfaced, as unemployment continues to rise.

The government has collected $1.59 trillion in revenues over the nine months of fiscal 2009. That was $340 billion less than over the same period a year ago because of decreased individual and corporate income tax collections.

Large investors, such as China, who have huge resources in US dollars, are concerned about the country's future, urging it to address the economic problems in more efficient ways. A huge deficit means the government will need to borrow or sell the debt with larger interest payments. Also, such a deficit might cause inflationary increases, which could very well mean the end of the dollar as a world currency.

Reference:

http://www.federalbudget.com/

Comments 2

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November 26, 2015, 11:17AM

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