WASHINGTON (Pakistan Point News / Sputnik - 13th April, 2020) The US budget deficit will exceed $3.8 trillion this year due to the impact of the novel coronavirus (COVID-19) pandemic and the country's debt will be larger than the size of its economy, rewriting in three years the record set after World War II, the Committee for a Responsible Federal Budget (CFRB) said on Monday.
"Our latest projections find that under current law, budget deficits will total more than $3.8 trillion (18.7 percent of GDP) this year and $2.1 trillion (9.7 percent of GDP) in 2021," CFRB, a bipartisan organization that addresses federal budget and fiscal issues, said in a statement. "We project debt held by the public will exceed the size of the economy by the end of Fiscal Year 2020 and eclipse the prior record set after World War II by 2023."
The CFRB said its 3.8 trillion deficit estimate was based on builds off the Congressional Budget Office's (CBO) pre-crisis baseline projection of $1.1 trillion in US 2020 borrowing and the $134 billion cost estimate for the 2020 effect of the Families First Coronavirus Response Act.
"On top of that, we estimate the Coronavirus Aid, Relief, and Economic Security (CARES) Act will cost nearly $2.1 trillion in fiscal year 2020 - though the cost could differ depending on spend-out rates and amounts for various provisions, the share of loan payments that are recovered, and the budgetary treatment of certain provisions," it said.
The CFRB said it also added the estimate of nearly $600 billion in additional deficit spending as a result of feedback effects from lower economic output, slower inflation, higher unemployment, and lower interest rates.
From: Barani Krishnan - [email protected]
Subject: US 2020 Deficit to Cross $3.8 Trillion, Debt To Dwarf Economy -Budget Panel CFRB
