The increase in public spending linked to the Covid-19 crisis, in particular the benefits paid to the unemployed, pushed the United States' budget deficit to a record level between October and December, according to data released on Wednesday by the Treasury.
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Over this period, which corresponds to the first quarter of fiscal year 2021, public finances have clearly slipped: the deficit increased by 61% compared to the same period last year, to reach 573 billion dollars, an amount never seen in a quarter.
Revenues have remained largely the same at $ 803 billion, but spending rose 18% to nearly $ 1.4 billion, a record level again.
On a seasonally adjusted basis, the increase in deficit is 57%, and that in expenditure is 17%.
The expenditure of the Department of Labor (DoT) exploded to 80 billion dollars against only 5 billion in the first quarter of fiscal 2020. This jump reflects the sharp increase in the envelope dedicated to allowances paid to job seekers in particular .
New recovery plan
In fact, at the end of March, Congress adopted a gigantic stimulus package of 2.2 trillion dollars to respond to the economic slowdown caused by the restrictions to contain the spread of Covid-19.
Within this framework, two new federal assistance programs for the unemployed have been put in place, while the duration of unemployment payment has been extended and benefits have been extended to workers who are not usually entitled to it.
The amount of food aid paid to Americans has also increased, as reflected by the 37% increase in spending by the Department of Agriculture, which stands at 72 billion dollars.
The latest $ 900 billion federal aid package adopted at the end of December does not appear in these accounts, as spending began in January.
Federal government spending in the face of the crisis caused by Covid-19 pushed the United States' budget deficit in fiscal year 2020 to a record level of $ 3.132 billion.
This is more than double the previous record, recorded in 2009, when, in the midst of a recession linked to the financial crisis, it had climbed to 1.4 trillion dollars.
The only good news for the public accounts and for the followers of budgetary orthodoxy: very low interest rates lowered the cost of debt in the first quarter, to 131 billion over the quarter, or 28 billion less than last year.