US fiscal deficit soars to $660 billion in March, aid may affect economy

It is reported that in the six months since October 2020, as the federal government continues to inject huge amounts of money into the economy to help workers and businesses cope with the pandemic, the U.S. budget deficit has grown to a record $1.7 trillion. To some extent, the federal government's spending far exceeds its revenue, that is, the U.S. spends twice as much as it earns.

Among them, the deficit in March 2021 was the third highest monthly deficit on record in the United States, exceeding the $864 billion in June 2020 and $738 billion in April 2020. The deficit in March was compared with the fiscal gap of $119 billion in the same period last year, including $268 billion in revenue and $927 billion in expenditure, both of which set a record for the month.

Treasury officials said the figures were up sharply from the same period last year, when the pandemic was just beginning and job losses were starting to hit the economy. The budget deficit, the difference between government spending and revenue, is expected to continue to grow in the coming months as money from the stimulus bill continues to roll out.

Spending on nutrition assistance programs, economic impact payments and expanded unemployment benefits increased sharply in the first six months of the fiscal year. Small business loan funds through the Paycheck Protection Program and funding for education and health service providers also contributed to the record spending.

Additionally, U.S. incomes rose 13% in March , helped by an increase in personal tax withholdings, representing strong earnings for higher-paid Americans who were able to work remotely, and higher overall employment levels among key employees.

Notably, the deficit for the first six months of fiscal 2021 ballooned to a record $1.706 trillion, compared with a deficit of $743 billion in the same period last year. In fact, the coronavirus pandemic did not have a significant impact on the first six months of fiscal 2020, as coronavirus-related lockdowns led to increased spending associated with rising unemployment, and significant new aid did not begin to be deployed until late March 2020.

On average, debt is growing faster than the economy is growing. This is unsustainable in the long run and may have some impact on the US economy .

March

Fiscal Deficit

Stimulus package