The United States’ budget deficit narrowed sharply in October, due to the end of many financial support measures, including unemployment benefits, for Americans affected by the coronavirus crisis.
The deficit fell by 42% to reach 165 billion dollars in October, the first month of the new fiscal year of the United States, against a deficit of 284 billion dollars in October 2020.
Tax revenues jumped 19% in October to $ 284 billion thanks to a strong economic recovery, which has benefited US businesses. Federal government spending, for its part, fell by 14% over one year, to reach $ 449 billion.
For the fiscal year ended at the end of September 2021, the United States posted a deficit of $ 2.800 billion, and the previous year, the deficit had reached a record of $ 3.100 billion. Washington has not hesitated to inject unprecedented amounts into the economy to counter the effects of the Covid-19 crisis. This strategy has borne fruit, but has helped revive inflation, which rose in October to 6.2% over one year, to the highest for 31 years, in 1990 …
Joe Biden’s investment plans set to keep deficits high
Fiscal year 2022 could mark the end of a series of record deficits, but that will depend on how much spending the Biden administration gets through the U.S. Congress. The Democratic president, who has just passed an infrastructure investment plan of around $ 1,000 billion, is struggling to convince elected officials to vote his other social spending and education project, amounting to nearly of $ 2,000 billion.
These plans could add several trillions of dollars in spending over the next decade, economists estimate. The latter expect budget deficits to remain high in the coming years, given the current path of public spending and anticipated tax revenues.
–
