The U.S. budget deficit for 2021 is already heading toward 2 2.3 trillion, equivalent to 10.4 percent of GDP, higher than any deficit recorded in any other year except 2020, according to estimates by the Responsible Federal Budget Committee.
In a report published by the American newspaper “The Hill”, writer Nev Ellis said that last year the US budget deficit reached USD 3.1 trillion, setting a new record and breaking the previous record, almost double the record of USD 1.4 trillion recorded in the midst of the global economic recession in 2008.
“This deficit will be the highest on record compared to any time in the country’s history since World War II,” the Federal Budget Committee said.
The epidemic was the main reason for the high budget deficit, as the government was forced to dramatically increase spending amid the economic meltdown.
The writer reported that The 2.3 trillion USD deficit projected for the current year was higher than the 1.8 trillion USD estimated by the nonpartisan Congressional Budget Office projected last September. This is mostly due to the fact that Congress approved an additional 900 billion USD subsidy package under the end-of-year funding bill.
And the expectation didn’t increase as it is planned because the size of spending and the group strategies tax expectations for economic recovery has improved, which means fewer unemployment benefits that companies and individuals pay for more tax revenue.
In general, economists largely agree that spending by borrowing during crises helps economic recovery, but large deficits must be addressed in good times in order to avoid a high debt ratio that would delay future economic growth.