Red Ink Overflowing: In June, U.S. Borrowed A Typical Year's Worth

Marco Green
July 14, 2020

"June's deficit figures highlights just how much havoc the coronavirus pandemic has wreaked on USA budgeting", said Jeff Stein of The Washington Post.

The federal government ran a bigger deficit last month alone than it usually does all year. The bulk of the June's jump in outlays was $511 billion for the government's Paycheck Protection Program, set up in April and created to keep small businesses afloat by funding loans that are forgivable if certain criteria are met. Analysts expect the deficit to total roughly $3.8 trillion for the 2020 fiscal year, which ends on September 30.

The report showed that the cost of the Paycheck Protection Program in June was United States dollars 511 billion. Those requirements include spending at least 60 percent of the loan amount on worker pay and having the other 40 percent go to overhead costs such as rent and utilities.

June receipts fell 28% to $241 billion, a reflection of job losses due to the coronavirus pandemic but also this year's extension of the tax filing deadline to July from April. That decision means that quarterly payments made by individual taxpayers and corporations will not be due until July 15 this year rather than June.

So far this budget year, revenues total $2.26 trillion, down 13.4 percent from the same period last year, while spending totals $5 trillion, up 49.1 percent from a year ago.

Even without another coronavirus relief bill, the annual deficit is on track to exceed $3.8 trillion, more than double the $1.4 trillion amassed in 2009 during the Great Recession.

The country fell into a deep recession in February, ending a record long expansion of almost 11 years. "In prior years, the federal deficit was considered large when it approached or eclipsed $1 trillion for an entire year".

The Indian Express is now on Telegram.

Other reports by Click Lancashire

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