The budget deficit in the United States hit another record. The indicator breaks to new highs on a regular basis. However, in the light of a raging pandemic, the figures reached unprecedented levels. On top of that, the country’s negative trade balance is growing faster than expected.
In the fiscal year that ended on September 31, the federal budget deficit tripled, hitting an all-time high of $3.1 trillion. However, it does not look as terrifying as it is in terms of gross domestic product, 15.2% of US GDP. The reason for the rapid spike in public debt was a noticeable surge in federal spending. Experts believe that the current situation bears considerable risks for the country and warn the US authorities that it is time to pull their belts in. Recent events, including trade wars with the rest of the world and the coronavirus pandemic outbreak, are only exacerbating the already critical state of the country.
Unfortunately, there are no hopes that the situation will change for the better, especially in the near future. The United States will unlikely be able to stop the growing budget deficit in the next couple of decades. Even if the country comes out as a winner in the battle against the coronavirus, the gap between spending and earning will continue to widen due to the population ageing and the growth of healthcare costs. According to the director of the Congressional Budget Office Phillip Swagel, in order to change the situation, US authorities will have to raise taxes, cut spending or take both steps at a time.
