Even so, the shortfall is smaller than the non-partisan agency’s April projection of $3.7 trillion. In 2019, the gap was $984 billion. The updated budget estimate, issued Wednesday and which incorporates legislation enacted through Aug. 4, also showed the U.S. deficit will total $1.8 trillion in fiscal 2021.
The projected deficit for this year would equate to 16% of gross domestic product, up from 4.6% in 2019 and the largest since World War II. U.S. government outlays this fiscal year will jump to $6.6 trillion, the CBO estimated as lawmakers scrambled to put in place fiscal backstops to preserve jobs and companies after state-ordered shutdowns of non-essential businesses.
The resulting economic recession is also being reflected on the other side of the nation’s fiscal ledger. Revenue is projected to fall to $3.3 trillion this year from almost $3.5 trillion in 2019.
A rapidly expanding government deficit means more U.S. borrowing, and the CBO projects debt held by the public will increase to $33.5 trillion at the end of 2030, or 109% of GDP. It will exceed GDP starting in the next fiscal year.
©2020 Bloomberg L.P.
Source: Economy - investing.com
