Budget deficit to become a record high this time
February 13, 2008
The federal budget deficit this time is all set to create a record high for all times. The treasury department projected a total deficit for this year at around $140 billion which is almost an all time high. The treasury on Tuesday said during the monthly review of the government’s finances said that the budget was running a bit high in the month of January. The total amount the budget has netted so far in the year is $87.7 billion which is almost double of what the amount was in the same period last year in 2007. The current budget year had started only as late as October 1st last year.
To top it all the Bush administration recently submitted its final budget request to the congress and this projected that the shortfall this time came to a total of $410 billion which is just very short of the all time high of $413 billion which was in the year 2004.
Till now the amount the Federal Reserve has spent has been 8.3 percent ahead of the previous year’s pace at around $949.1 billion. This is way ahead of this year’s increase in revenues which is just 3.2 percent and has totaled almost $861.4 billion in this year’s budget.
In 2007 however the budget deficit was just $162billion which was the lowest in the last five years. The economic stimulus plan that was passed last week is expected to increase the current budget to an even higher figure. But the ever slowing economy is predicted to put the brakes on the recent growth of the tax revenues. All this is definitely enough to create enough hassles about this year’s budget.
When it is widely believed that the economic stimulus plan would greatly help in keeping the economy out of the recession the impact it is going to create on the budget is going to be enormous. Even if the bill fails to keep a recession away, it is definitely going to help to keep the downturn shorter and milder than it would otherwise have been. The rebates on tax that would be available to the people as a result of the provisions that are there in the economic stimulus plan are going to tax the treasury a lot. The bill has been estimated to be around $168 billion by the end if it is implemented completely. The rebate cheques which are the most important part of this plan is supposed to reach the people by the end of May and it has been schemed in such a way that all the tax paying citizens of the country receive a reduction in the amount of the tax that they pay. The bill also has provisions which are there to help the people who are facing problems due to the turbulences in the housing market. How much the budget deficit is going to swell up has to be watched and seen.
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