US Deficit Now At $3T With Stimulus Spending

The annual U.S. budget deficit rose above $3 trillion for the year ending in June amid plummeting tax revenues due to mass unemployment and shuttered businesses during lockdown periods, The Wall Street Journal reported.

The budget deficit widened to $864 billion in June of this year, a new monthly record and almost as much as the entire previous fiscal year’s gap of $984 billion, the report said.

The 12-month deficit, as a share of gross domestic product, rose to 14 percent last month, higher than the 10 percent from 2010 when the country was just coming back from the 2008 recession.

The entire total is setting the U.S. on track to name the largest deficit since the end of World War II.

According to the Congressional Budget Office, the annual deficit could total $3.7 trillion by the end of the fiscal year on Sept. 30, 2020, and that gap might get even wider if the government decides to pass another round of emergency spending to offset the economic damage of the pandemic.

Economists have argued in favor of another round of stimulus funding, saying it could be a lifeline for families and businesses struggling with the economy not yet recovered. The government has already funneled trillions into previous plans to help everyone from individuals to businesses.

Because of the rise in red ink, Republican lawmakers have pushed against calls for more sweeping financial aid bills, saying it would be better to target specific industries.

Maya MacGuineas, president of the watchdog group Committee for a Responsible Federal Budget, said it was a double-edged sword that the government had already spent so much on financial aid during the pandemic.

“The good news is this means we’re getting fiscal relief out the door fast,” she said, according to WSJ. “The bad news is that we’re having to borrow record amounts on top of so much unpaid-for spending and tax cuts that lawmakers approved in the past few years.”