Due to the funds pumped into the economy amidst the COVID-19 pandemic, the US has an increased budget deficit. This deficit is expected to grow till the economy improves.
US budget deficit has increased as the government pumps more fund
The US has witnessed an increase in the budget deficit to $164 billion as they continue to pump more stimulus aid to families and unemployed citizens.
This financial deficit increased in January from a $35 billion budget lacuna in the same month in 2020. The budget gap for the first quarter in the current year was 90% higher than last year-, $735 billion vs. $345 billion.
The US government has sanctioned about one billion dollars in aid payments by the end of 2020. A plethora of families received about $550 checks or rent money, also benefits for unemployment benefits increased. National spending increased by 22% to $548 billion from last year.
A most significant deficit in the US history
Also, the government spent £410 billion in the same month as of January 2020. Principal tax receipts have seen an improvement, which shows the US economy is recovering gradually as various private firms and businesses have been able to adjust comfortably. The US government works on a yearly budget that runs from October to September.
This shortfall was the biggest witnessed since 1946. When we add the $910 billion in fresh economic aid that former president Trump approved at his administration's twilight. Also, President Joe Biden is asking for about $1.9 billion in extra economic stimulus.
However, it seems the Democratic-led house has decided to pass the package very soon. However, there appears to be a deadlock between the Republicans and the presidency to agree to the deal. Most Republican leaders want the package to be trimmed down as they believe it is too much and will affect the US economy in the future.