US budget deficit rises to record $ 3tn


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The US budget deficit has hit a record high of over $ 3tn (£ 2.3tn), driven by the government’s heavy spending on coronovirus relief.

The Treasury Department said the federal government spent more than $ 6tn in the first 11 months of its fiscal year, including $ 2tn on coronovirus programs, the Treasury Department said.

This figure increases the $ 3tn collected from taxes.

This decrease is double the previous full year record, which was set in 2009.

At the time, Washington had been battling since the 2008 housing financial crisis.

Even before the epidemic, the US was on track to run losses of more than $ 1tn this year – larger than historical standards.

But approved spending to try to mitigate the virus’s financial impact has exploded those estimates.

This month the Congressional Budget Office predicted that the US was likely to run a full-year deficit of $ 3.3tn, more than triple the decrease recorded last year. The federal government’s fiscal year ends in September.

The agency said it expected total US debt to exceed $ 26tn.

‘Unsustainable’

At a hearing in Washington in June, the head of the US central bank, Jerome Powell, told members of Congress that America’s spending path was “uncertain”, but said reducing the deficit should not be a priority given the state of the economy.

The economy shrank at an annual rate of over 30% in the April – June period, the worst quarter on record. The data suggests job layoffs and trade offs continue.

Roughly 30 million people – about 20% of the American workforce – remain in some form of unemployment benefit, despite being turned on, the Labor Department said this week.

Many conservatives in Washington, however, remain for further spending.

This week Republicans proposed $ 300 billion for more aid. The plan failed to move forward, with Democrats saying it had lost more than $ 3tn in giving relief.

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