US Budget Deficit In June Reached A Record Of $864 Billion
The US state budget deficit in June was a record of $864.074 billion, compared with just $8.477 billion for the same month last year, the US Department of Treasure reported.
This number is a record size of the negative balance for the time of conducting calculations; the previous maximum was recorded in February of this year. It is due to the immense amounts of funds that the government allocated to help small businesses and citizens who lost their jobs due to the COVID-19 pandemic.
Budget revenues last month fell by 27.9% to $240,829 billion from $333,952 billion a year earlier.
At the same time, spending last month jumped to $1.105 trillion against $572.614 billion in May this year and $342.43 billion in June 2019. The primary part of the cost came from the Paycheck Protection Program (PPP), which includes covering the cost of paying wages to small businesses.
As a result, for the nine months of the 2020 fiscal year, which began on October 1, the negative balance of the US budget increased by 3.7 times - to $2 trillion 744.3 billion compared to $747.1 billion for the comparable period a year earlier.
Spending since the beginning of the current fiscal year has soared by 49.1% and exceeded $5.004 trillion.
Budget revenues decreased by 13.4% to $2.26 trillion; this is also due to the postponement of the 2019 tax payment deadline due to the COVID-19 pandemic from April 15 to July 15.
The congressional budget office (CBO) predicts that the deficit will soar to $3.7 trillion by the end of the 2020 fiscal year, that is, to the level of the 40s; this will amount to 17.9% of GDP, the maximum since the Second world war. For comparison, during the financial crisis in 2009, the negative balance was $1.413 trillion, or 9.8% of GDP.
The negative balance of the US budget reached a peak of 27% of GDP in 1943, and then it remained above 20% of GDP in 1943-1945.
The state budget deficit for the last fiscal year, which ended on September 30, 2019, increased by 26%, reaching the highest level in the past seven years at $984.388 billion. It rose to 4.6% of GDP against 3.8% of GDP in the previous year.
The deficit increased for the fourth consecutive year, the longest period of continuous growth since the early 1980s.
The last time a budget surplus was recorded in the United States was in 2001.