The US budget deficit came in at $864 billion in June, a record high.
The federal government incurred the biggest monthly budget deficit in history in June, with a $864 billion deficit last month, an amount that surpasses most annual deficits in the nation’s history and is above the previous monthly deficit record of $738 billion in April.
The amount also tied to the trillions of dollars Congress has provided to cushion the impact of the widespread shutdowns that occurred in an effort to limit the spread of the viral pandemic. According to MarketWatch, the United States is on track to register a record $3.7 trillion deficit in fiscal 2020 owing to an unprecedented effort to prop up the economy. For all of last year the budget gap totaled almost $1 trillion. The last time the U.S. ran such huge deficits — measured as a percentage of the economy — was during World War II.
Washington has already funneled huge sums of money into direct payments to households, extended unemployment benefits, small-business loans and bailouts of industries deemed critical such as airlines. Congress could also add more than $1 trillion in additional emergency-relief measures before the end of summer, Market Watch adds. The economy is likely to need lots of help at least through the end of the year with tax revenues down and so many people and companies in need of support
“The risk is that the deficit will be larger due to additional stimulus but, given the congressional timetable, the impact of the next package will likely be skewed to fiscal 2021, which starts Oct. 1,” said Nancy Vanden Houten, senior economist at Oxford Economics.