The US has announced, as coronavirus-related rescue packages shatter the budget, the country wants to borrow a record $3tn (£2.4tn) for the second quarter. According to the report, it is more than five times as compare to the previous quarterly record, set at the height of the 2008 financial crisis. In all of 2019, the country already borrowed $1.28tn.
In similar, the US has approved $3tn in virus-related relief, which is including health funding and direct pay-outs. Till now, the total sum of US government debt is near $25tn.
The US’s national debt soared above 100% of GDP while the Congressional Budget Office last month forecast the budget deficit would hit $3.7tn this year.
“I would have liked to see the US government’s books be in better shape before the pandemic” says Jerome Powell. He is the chair of America’s central bank, Jerome Powell. However, he added “spending now was essential to cushion the economic blow, as orders to shut businesses to slow the spread of the virus cost at least 30 million people their jobs.” He further said “It may well be that the economy will need more help from all of us if the recovery is to be a robust one”.
The US’s latest spending packages are valued to be worth about 14% of the country’s economy. The US government has also postponed the annual 15 April deadline for tax payments which is adding to the cash crunch. The new borrowing evaluation is more than $3tn above the government’s previous one. This is also a sign of the impact of the new programmes. However, discussions are currently under way for further assistance, yet some Republicans have shown their concerns about the effect of more expenditure on the country’s constant increasing national debt.
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