The US budget deficit for 2021 is actually heading towards $ 2.3 trillion, equivalent to 10.4% of GDP, which is higher than any deficit recorded in any other year except for 2020, according to the responsible Federal Budget Committee estimates.
In a report published by the American newspaper, The Hill, writer Nev Ellis said that the US budget deficit last year reached $ 3.1 trillion, setting a new record and smashing the previous record, almost double the record of $ 1.4 trillion recorded in the midst of the recession. World Economic Year 2008.
In this context, the Federal Budget Committee stated that "this deficit will be the highest recorded deficit compared to any time in the country's history since World War II."
The pandemic was the main reason for the high budget deficit, as the government was forced to massively increase spending in the midst of the economic meltdown.
The writer mentioned that the deficit of $ 2.3 trillion expected to be recorded this year was higher than the estimated rate that the non-partisan Budget Office in Congress expected last September at $ 1.8 trillion.
This is mostly due to the fact that Congress approved an additional $ 900 billion relief package under the Year-End Funding Bill.
The estimate did not grow as expected, given that the volume of spending, the set of tax strategies, and expectations for economic recovery have improved, which means that the unemployment benefits that companies and individuals must pay in return for more tax revenues have diminished.
In general, economists largely agree that borrowing spending during crises helps achieve economic recovery, but large deficits must be addressed in good times in order to avoid high debt ratios that would delay economic growth in the future.