Smaller in Absolute Size but, Bigger the US Budget Deficit

Due to the rapid recovery of the US economy, the Biden government predicts that this year the Federal Budget deficit will be $555 billion lower than the corresponding budget in May.

In absolute numbers, the forecast is for a deficit of $3.12 trillion for the financial year ending September 30, 2021. The deficits are not projected to shrink below $1 trillion, while for the financial year 2022 (1.10.2021 – 30.09. 2021) the US government forecasts a deficit of $1.54 trillion.

More red ink: US budget deficit through July hit $2.54T | National News |

The issue that arises is that the US government does not consider the two new fiscal support packages of the economy with the first of the two being around $1 trillion for spending on infrastructure, roads, railways, etc. and the second $3.5 trillion package for extended healthcare, improving preschool and lower school education, and climate change projects.

The overall deficit has worsened as the government approved trillion-dollar programs to support workers and businesses affected by the Covid-19 pandemic.

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