The US government encountered the biggest ever budget deficit of $864 Billion in June. The deficit hit an all-time high as the federal spending to counter the corona-virus are on the peak. The tax revenue is also at worst.
The treasury department on Monday reported that the USA incurred exceeded the April month’s $738 Billion marks and surpassed many annual deficits of the nation too.
The congressional budget office has also forecasted the annual deficit for the current year to be around $3.7 trillion, out of which $3.2 trillion already cover for the first nine months, starting from October 2020. It would also break the previous record of $1.4 trillion, which happened to be in 2009. When the government was trying to cushion the economy hit by the recession.
The primary reason behind the June deficit is millions of job losses and the reduction of tax revenue in the US.
Currently, the government is spending on relief programmes like the Paycheck protection that contribute to employers for keeping employees on the job and expand unemployment benefits which pay an extra $600 per week.
Meanwhile, the federal administration is reported to pay $511 Billion in the Paycheck Protection Program, in June only.
The US administration also decided to delay the tax payment until July 15. Many people would not pay taxes because of the job losses.
In total, the revenues are worth $2.26 trillion, for the current financial year, which is 13.4% less than the amount collected last year at the same time. The spending also rose to 49.1% from the previous year, amounting to $5 trillion.
The federal administration predicts that the economy will bounce back in the second part of the year. Still, some private predictors say that the asymptotic & resurgence cases of the COVID might seed the fear in people’s heart, which would eventually reduce spending, which is 70% of the economic drive.