The $3 trillion deficit between October and August, worsened by coronavirus relief spending, more than doubles the previous all-time high shortfall of $1.37 trillion set in 2009.
The U.S. Treasury Department on Friday said the budget deficit soared to a record high of $3 trillion through the first 11 months of this financial year. The announcement came just days after China indicated it may dump American treasuries if tensions between Washington and Beijing continued to escalate.
The deficit between October and August, worsened by coronavirus relief spending, more than doubles the previous all-time high shortfall of $1.37 trillion set in 2009. During that 11-month period, the federal government sunk large sums to generate movement out of the 2008 financial crisis and ensuing Great Recession.
More than $6 trillion has been spent this financial year—nearly $3 trillion on COVID relief—a figure double the $3 trillion generated from taxes. The imbalance is enormous compared to last year's $984 billion. And with the budget year ending on September 30, the Congressional Budget Office forecasts that the deficit will increase to $3.3 trillion. With that, America's debt will likely soon eclipse $26 trillion.China recently announced it would dump American debt.
Shaun Breslin, a professor of politics and international studies at the University of Warwick in the U.K., toldthat such a move"would have so many detrimental impacts on China as well, not least massively reducing the value of anything that they had left."
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