Massive government spending and declining taxes related to the neo-coronavirus pandemic have caused the U.S. federal budget deficit to balloon to more than $3.1 trillion in FY2020, tripling the 2019 budget deficit.
This deficit is more than double the record $1.4 trillion set during the 2009 economic crisis.
According to the Associated Press, the 2020 budget deficit is equal to 15.2 percent of U.S. gross domestic product (GDP), the highest since 1945, when the United States borrowed massively as a result of its participation in World War II.
The deficit was projected to reach $1 trillion in February of this year, but epidemic-related closures have prompted the government to allocate large sums of money for spending, while on the other hand, the severe economic downturn has led to lower tax revenues.
During 2020, government revenues fell 1.2% to $3.42 trillion, while government spending jumped 47.3% to $6.55 trillion, mostly to support the economy and help Americans who lost their jobs due to the closures.
About 22 million Americans lost their jobs in March and April during the lockdown for epidemic preparedness. About half of them have returned to work. With millions of people still facing economic uncertainty, there will continue to be calls for further stimulus funding from the federal government.
The White House and Congress remain deadlocked on a new stimulus package.
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