The U.S. booked a budget deficit of $572.9 billion in the first quarter of its new fiscal year, a fiscal hole of 60.7 percent, or $216.3 billion, deeper than during the same period a year earlier.
The budget gap widened as spending zoomed up 18.7 percent to pay for pandemic-related health care and an array of federal bailout programs. At the same time, revenue edged down 0.4 percent to $803.4 billion as businesses closed, temporarily or permanently, cutting federal tax collections.
In December alone, outlays totaled a record $489.7 billion and revenue was $346.1 billion, leaving a deficit of $143.6 billion.
Much of the additional deficit was created by $600 weekly federal unemployment benefit payments, which totaled $80 billion from October through December. For the same period in the previous fiscal year, the figure was $5 billion.
The figures do not include the additional $900 billion signed into law at the end of December because the spending did not start until this month.
President Joe Biden has proposed another $1.9-trillion stimulus round.
The Congressional Budget Office has forecast a $1.8-trillion federal deficit this fiscal year, with the annual deficit reaching or exceeding $1 trillion through 2030.
The estimate may be conservative.
TREND FORECAST: As we have forecast, Washington’s money-pumping injections to artificially prop up the sagging economy will be greater than currently proposed. We also forecast that the Biden administration will send bigger relief checks to individuals as well as large and small businesses, which will also increase the deficit.
Again, the more cheap money pumped into the system, the deeper the dollar falls and the higher gold, silver, and bitcoin prices rise.
