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Record-high budget deficit in the US – before the Great Depression – E24

Billions are pouring out of the U.S. Treasury. The already massive debt mountain will soon receive a crisis package equivalent to one and a half oil funds.

Large sum: US President Joe Biden is set to sign a major crisis package on Friday. This week, even before the new package was added, his government released figures showing that the budget deficit was higher than ever.

Patrick Semansky / A.P.

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The U.S. budget deficit narrowed to $ 1 trillion in the first five months of the fiscal year, which began in October. Tall From the U.S. Treasury Department. According to this, the highest amount for a period of five months Bloomberg And Forbes.

On the same day that Congress sent an unusually large crisis package to President Joe Biden, who was preparing to sign, an amount equal to more than $ 8,400 billion was announced.

February figures are new: they fell to a deficit of $ 310.9 billion, up from $ 235.3 billion in the same month last year.

The increase in the February deficit was attributed to public consumption, which increased by 32.1 percent from the same month last year. Taxes also increased somewhat, but costs were also lower.

This raised the deficit to $ 1.050 billion in the first five months of the budget year. It was $ 624.5 billion at the same time last year.

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Biden’s package of $ 1.900 billion was approved by the House of Representatives

Crisis aid 16,000 billion

These figures include the $ 900 billion corona package that went through in December, but not Pitton’s $ 1.900 billion crisis package, which Congress gave the green light on Wednesday.

President Joe Biden is scheduled to sign the $ 1.9 trillion crisis package on Friday. This amount is equivalent to about 16,000 billion kroner, which, according to Bloomberg, is much larger than analysts initially expected to go through Congress.

By comparison, the Norwegian Petroleum Fund is worth less than NOK 10,900 billion, which means that Biden’s crisis package is one and a half times larger.

Republicans are fighting the recovery package, pointing to concerns about government deficits and debt.

Democrats, for their part, argued that failing to provide adequate crisis aid would be worse for the economy than any budget deficit, especially since interest rates are so low that it is good in terms of public welfare spending.

Biden’s U.S. bailout plan expects the deficit to widen to $ 1.1 trillion this year and $ 528.5 billion by 2022.

E24 previously wrote that the Budget Office expects interest costs to rise and that debt to the United States will double by 2051. By 2031, U.S. debt will reach 107 percent of GDP, surpassing others since the end of World War II. After that, the CBO’s key scenario says that debt will increase to 202 percent of GDP by 2051.

Fear of inflation

In a phone interview with E24 on Tuesday this week, Olav Chen, portfolio manager at the store brand, said how inflation is now a thousand kroner question.

The question is whether inflation will continue to rise and remain commercially high in the long run. He insists the crisis package will be record-breaking, but funded by borrowed money.

– Debt in the United States continues to rise. Can the government always spend a lot of money?

– Central Bank Governor Jerome Powell and Finance Minister Janet Yellen have both called for a drive. The title is coming, but I think the markets are starting to get a little worried about it now. Since we have decided to close, the authorities have to spend a huge amount. Sen says the focus on sustainable levels of government debt could be the next chapter.

The latest inflation figures have given investors some reassurance, at least for now. In February alone, consumer prices rose 0.4 percent and year-on-year 1.7 percent. Both figures were in line with the estimates.

“Ten-year-old” interest rate growth, that is, ten-year U.S. government securities, has calmed down somewhat. Higher interest rates have been linked to a sharp fall in US indices in the transition between February and March. Infrand’s figures show that the interest rate is about 1.53 percent.

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