Wednesday , April 8 2020
Home / czechrepublic / Disaster when it falls? The US budget deficit is close to one trillion dollars

Disaster when it falls? The US budget deficit is close to one trillion dollars



Business

Get a short URL

According to the results of the 2019 financial year, the US budget deficit reached $ 984 billion. This was stated in a statement by US Treasury Secretary Steven Mnuchin.

Compared to 2018, the situation has worsened $ 205 million, but this figure is 16 billion less than previously thought. According to restored figures, the deficit reached 4.6 percent of GDP.

The Budget Office had previously stated that by 2049 US government debt would increase to 144 percent of GDP and reach the highest level in the country's history. Its report states that in 2019 the US government debt will be 78 percent of GDP.

The US situation is projected to improve over the next ten years and the budget deficit will continue to increase due to an aging population and increased health spending. In the view of Philip Swagel, director of the budget authority, to change the situation, US authorities must raise taxes, cut expenses, or take both at the same time.

In office, they confirmed this pessimistic forecast with a draft budget, coordinated by US President Donald Trump and Congress. The document, which was approved for the financial years 2020 and 2021, raised the state debt ceiling for the period to July 2021 and increased government spending.

US predicts default

The United States might fail in early September because tax revenues are too low. Bloomberg reports this, referring to the Bipartisan Political Center (BPC) report.

Analysts pointed out that the US could cross the country's debt threshold in early September, unless Congress decides to increase it. Experts had previously estimated that the US would exceed this threshold in October or November 2019.

This is caused by tax revenues that are too low, which increased by only three percent compared to last year, not the six percent expected previously.

In early 2019 it was exceeded United States state debt for the first time in history, $ 22 trillion. In fiscal 2018, the US budget deficit increased 17 percent to $ 779 billion. Projected to exceed $ 1 trillion by 2020. Government debt tends to maintain a tendency to accelerate growth, because government spending is not controlled.


Source link