Record US budget deficit

2009-10-17 13:34

kalahari.com

  • Economy
    Helps your child learn about the economy. Now R139.00
    buy now
Washington - The US government closed its 2009 fiscal year with a record $1.417 trillion budget deficit as it poured resources to contain a serious financial crisis that plunged the nation into recession.

The deficit was some $962bn higher than the prior year and amounted to 10% of US gross domestic product (GDP), the highest since 1945, officials said on Friday.

The huge jump in the budget shortfall stemmed from both declining revenues and a massive ramping up of spending in a fiscal stimulus to jolt the world's largest economy from a prolonged recession following the worst financial crisis in decades.

Receipts for the fiscal year that ended in September totalled $2.105 trillion while outlays were $3.522 trillion, the Treasury said.

Officials, however, pointed out that the deficit was $162bn lower than the $1.580 trillion forecast by the administration of President Barack Obama, who inherited the flood of red ink from his predecessor George W Bush.

Severe recession

"The financial year 2009 deficit was largely the product of the spending and tax policies inherited from the previous administration, exacerbated by a severe recession and financial crisis that were underway as the current administration took office," Treasury Secretary Timothy Geithner and White House budget chief Peter Orszag said in a joint statement.

The deficit was lower than projected "in part because we are managing to repair the financial system at a lower cost to taxpayers", Geithner said.

"But future deficits are too high, and the president is committed to working with Congress to bring them down to a sustainable level as the economy recovers," he said.

Orszag said "it was critical that we acted to bring the economy back from the brink earlier this year", referring to the financial crisis that resulted from a housing market meltdown.

The crisis plunged the country into recession in December 2007 and led to the collapse of financial and investment houses and a massive government bailout of some of the institutions.

"As we move from rescue to recovery, the president recognises that we need to put the nation back on a fiscally sustainable path," Orszag said.

As part of the fiscal year 2011 budget policy process, he said the Obama administration was considering proposals to put the country "back on firm fiscal footing".

Fiscal mess

Obama's Republican critics have stepped up their calls for the president to abandon his key reform plans to remake US health care and combat climate change that some estimate could cost several trillions of dollars.

"Congress simply can't continue acting like a teenager on a spending spree with his parent's credit card with no regard to who pays the bill," said US Senate Republican leader Mitch McConnell.

"We need to listen to the American people: No more spending money we don't have," he said.

Judd Gregg, the Republican leader of the Senate budget committee, predicted the Obama administration would be saddled with "deficits approaching one trillion dollars for each and every one of the next 10 years".

"These annual deficits translate into a build-up in debt that will crush our economy."

But House of Representatives budget committee chair John Spratt said "It would be harmful to try to balance the budget at a time when the economy has not fully recovered and so many Americans are still struggling".

"So as the economy recovers, we will need to turn our focus back to deficit reduction."

Meanwhile, Senator Kent Conrad, the Democratic chair of the Senate Budget Committee, said the deficit announcement "again highlights the fiscal mess handed to the Obama administration" by the administration of former president George W Bush.
Read more on:    economy
SHARE:

Read News24’s Comments Policy

 

Inside News24

 
/Oscar Pistorius
 

6 impressive camping tips

Check out these great tips that will make your camping experience so much better!

 
 

Where were you when you last felt alive?

Free outdoor yoga classes
Watch: 5 skills to improve your BMX riding
Action camera for all occasions
Tips on how to set your fitness goals

Jobs in Cape Town [change area]

Property [change area]

Travel - Look, Book, Go!

Magical Massinga

Spend 5 nights at the gorgeous Massinga Beach Lodge in Mozambique and only pay for 4 from R13 220 per person sharing. Includes return flights, accommodation, transfers and romantic turndown. Book now!

Kalahari.com - shop online today

Save up to R1000 on Hisense smartphones!

View the large range of Hisense smartphones. Buy today and save up to R1000!

Deal of the week!

Save R1200 on the Samsung 48” smart full HD LED television now only R8799. Buy now!

Toys 4 for the price of 3

Buy 4 toys and get the cheapest FREE! Offer valid while stocks last. Shop now!

Mind blowing prices – As seen on TV

Get mind blowing prices on 1000’s of products! Shop now.

Save 20% on Nivea beauty products!

Buy any two Nivea beauty products and save 20%. Offer valid while stocks last. Shop now!

OLX Free Classifieds [change area]

Samsung Galaxy s4

Mobile, Cell Phones in South Africa, Western Cape, Cape Town. Date October 24

Best bargain in big bay

Real Estate, Houses - Apartments for Sale in South Africa, Western Cape, Cape Town. Date October 25

VW Golf 6, 1.6 Trendline (Excellent condition)

Vehicles, Cars in South Africa, Western Cape, Cape Town. Date October 25

Horoscopes
Aquarius
Aquarius

There is an easy social flow and the need to blend in, yet you may not feel entirely comfortable. Something beneath the surface...read more

There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.








Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.