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Nearly a trillion dollars minus: US Treasury Secretary Mnuchin reports the highest deficit in the US budget for seven years

2019-10-25T20:25:41.434Z


There is a growing gap in the US government's budget, with the deficit up 26 percent year-on-year. Experts are responsible for Trump's tax cuts.



The US government has closed fiscal year 2019 with the highest budget deficit in seven years. The deficit has increased by $ 205 billion compared to the previous year to $ 984 billion (885 billion euros). This was reported by the US Treasury. The strong increase of around 26 percent relates to the financial year 2019, which ended in late September. Accordingly, the new debt represented about 4.6 percent of American economic output - 0.8 percentage points more than in the previous year. Although the revenue increased by four percent to $ 3.462 trillion. At the same time, government spending grew by eight percent to $ 4.447 trillion. The deficit was $ 16 billion lower than forecast in July, it said.

US Treasury Secretary Steven Mnuchin nevertheless assessed the budget balance as proof that Trump's economic agenda is "working". He appealed to Congress to stem "wasteful and irresponsible spending."

Fear of the recession

Experts attribute the tremendous deficit to, among other things, the after-effects of US President Donald Trump's tax cuts and higher spending on the deficit. The government had predicted that the revenue shortfalls caused by the tax cuts would be offset by the growth impetus generated by the reform, ie the tax revenues from growing economic activity and employment. But despite the continued solid growth rates so far, it has not been possible to compensate for the increase in spending. In addition, worries about a possible recession are growing in the US.

Trump had announced after taking office to want to eliminate the deficit within eight years. The Ministry of Finance said that, among other things, social, defense and debt service spending had increased. The government debt now amounted to 16.8 trillion US dollars, it said.

It is the second full financial year under Trump who has taken office in times of prosperity. The deficit reached $ 1.4 trillion in 2009, when the government under Trump's Democratic predecessor Barack Obama saved the banking system from collapse in the global financial crisis and supported the economy. Obama then reduced the deficit to $ 585 billion by the end of his second term in 2016. He was then, however, sharply criticized by the Republicans, who had demanded a greater reduction.

Source: spiegel

All business articles on 2019-10-25

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