Record Budget Deficit: USD 1 Trillion
Jeroen Blokland | Nov 14, 2019 08:52
The 12-month cumulative US budget deficit rose to more than USD 1 trillion in October.
It was the first time in six years that the gap between federal expenditures and receipts crossed the threshold of USD 1 trillion, pushing the deficit to 4.6% of GDP, as today’s chart by Bianco Research shows.
Obviously, there have been bigger deficits in history, but this one comes at a time of decent and stable economic expansion. If anything, government policy has been pro-cyclical instead of the more prudent anti-cyclical. With government debt to GDP above 100%, there will also be less room for fiscal stimulus if the economy turns sour. Also, this increases the risks of another government shutdown in the upcoming election year.
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