In the United States, the federal budget posted a record deficit of $ 3.1 trillion at the end of the previous fiscal year, according to data released by the Treasury.
The current deficit is double the previous record deficit recorded during the global financial crisis about ten years ago.
It is likely that the wide gap between the income and spending of the federal government in the United States came as a result of the financial rescue package for the economy in the face of the Corona virus, which included spending huge funds to help companies and the unemployed in the face of the deterioration that befell the US economy.
The budget deficit increased by about 218 percent in the fiscal year ending last September, indicating a weak record for the US budget deficit in 2009, which indicated $ 1.4 trillion.
Government spending increased while state tax revenues declined due to the closure of a large number of companies affected by the epidemic.
The US Treasury Department confirmed that the total US budget deficit rose to $ 26.9 trillion, which exceeds the value of the US gross domestic product, which fell in the second quarter of this year to $ 20 trillion.
And federal government expenditures in the fiscal year ending at the end of last month fell by 47 percent, while total expenditures decreased by 1.00 percent.
Nevertheless, the near zero interest rate in the United States helped to reach the current picture of financial conditions, as these zero rates reduced interest payments by 0.9 percent, or $ 50 billion, during the ended fiscal year.
The financial gap in the federal budget has widened since President Donald Trump took over the presidency of the United States, as the budget deficit crossed the $ 1 trillion barrier this year even before the spread of the Corona virus, for the first time since 2012.
It is likely that the tax cut stipulated by the US tax cut and jobs law passed by the US Congress in 2017 is behind the decline in tax revenues in exchange for higher government spending, which led to a widening budget deficit.
Improving Trump’s image
US administration officials are trying to exploit the large increase in the budget deficit in favor of the US President, as they suggested that these financial deficit indices came as a result of the president’s rapid move towards harnessing the country’s economic resources to alleviate the economic damage that falls on US companies and families as a result of the spread of the epidemic.
“Under President Trump’s leadership, the American economy has made an amazing comeback,” said Stephen Mnuchin, the US Treasury Secretary, and Russell Foot, Director of the White House Budget Office, in a joint statement.
“The administration remains fully committed to supporting US employment, families and companies, and ensuring the continued recovery of the economy,” Mnuchin added.
US President Donald Trump’s team has been in talks for many weeks with leaders in the Democratic Party in order to reach an agreement on the value of the second package of financial rescue for the American economy, to be added to the first stimulus package, which amounted to about 3 trillion dollars, including 2.2 trillion dollars under the Cares Act. Which was passed by the US Congress last March to support the economy in the face of the epidemic.
But officials from both sides believe that it will be difficult to reach an agreement on the second stimulus package before the 2020 US presidential elections, which are scheduled to take place on the third of next November.
The Trump administration has not reached an agreement with the US Congress on the second stimulus package for the economy in the face of the Corona virus, amid calls by a large number of US senators to reduce financial support as part of another financial rescue package.