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.
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.