IIn the United States, the budget deficit has tripled compared to the previous year due to the Corona stimulus packages: In the fiscal year up to and including September, the American government made a loss of 3.1 trillion dollars (2.65 trillion euros). The deficit for 2020 was two trillion higher than estimated at the beginning of the year, as the Ministry of Finance said on Friday. In the previous year, the shortfall was still $ 984 billion.
In order to cope with the severe economic consequences of the coronavirus pandemic, Congress has already adopted economic measures worth around three trillion dollars since March. That is why the expenditure in the past fiscal year was 6.5 trillion well above the income of 3.4 trillion, as the ministry announced.
The unemployment rate is falling again
The public debt of the American government increased significantly during the tenure of President Donald Trump despite the good economic situation and is now around 21 trillion dollars. That is almost the entire annual economic output of the United States.
The pandemic and the measures taken to contain the virus had sent the American economy downhill from March. Growth collapsed and unemployment soared to record highs. According to the Federal Reserve (Fed), the extensive stimulus packages helped prevent an even more dramatic slump. The economy is now recovering and the unemployment rate has also fallen significantly: it stood at 7.9 percent in September. Before the pandemic, however, it was only 3.5 percent – the lowest level in decades.
Dispute over another stimulus package
Another trillion dollar economic stimulus package has been negotiated between the government and Congress for months. The Federal Reserve has warned that the economic recovery could stall if there is no new injection of government money. Trump’s Republicans and Democrats still have very different ideas about another stimulus package. An agreement on a new package therefore seemed increasingly unlikely before the US election on November 3rd.
The government recently proposed a $ 1.8 trillion package, but the Democrats are calling for more extensive action. An economic stimulus package requires the approval of both chambers of parliament: the Democrats control the House of Representatives, the Republicans the Senate.
Among other things, the Democrats also want to help states and municipalities that have suffered major revenue losses due to the pandemic. The Republicans reject it. Their proposal to give employers largely immunity for possible corona lawsuits is rejected by Democrats. The Republicans had also proposed that smaller parts be passed where there was agreement. The Democrats only want to accept a comprehensive package.
In the United States, the number of new corona infections is also increasing again every day. After the number remained at around 40,000 for a long time, around 60,000 people have recently been infected every day. Experts now fear a further increase.