Federal spending soared in March when the government sent a third round of stimulus payments to Americans, pushing the budget deficit to a record $ 1.7 trillion in the first half of the fiscal year.
The budget deficit, exacerbated by the Covid-19 pandemic and related shutdowns that sent the economy into a tailspin from March 2020, is now more than double what it was for the same period a year ago, the Treasury Department said Monday. .
The deficit was $ 660 billion last month, 454% higher than the same month a year ago. Sales were up 13% to $ 268 billion, while spending grew 161% to $ 927 billion – the third-highest total on record, after June and April last year.
The rise in government spending has somewhat cushioned the economy from the devastation of the pandemic, but it has also pushed federal debt to levels not seen as part of the economy since the end of World War II. Weaker tax revenues contributed to the budget deficit.
“While much of last year’s borrowing was undoubtedly justified, we are now becoming dangerously numb to the trillions of debts piling up,” said Maya MacGuineas, chair of the bipartisan committee on a responsible federal budget. “We have to pay for what we spend. We need a plan to reduce debt. “