US federal deficit hits US$1.1-T so far this fiscal year
The federal deficit of the United States recorded US$1.1-T in the 1st 10 months of F-Y 2010-2011, indicating it is the 3rd consecutive year that the US fiscal imbalance topped the US$1-T mark, reported the Treasury Department Wednesday.
The Treasury data showed that the US federal budget deficit in July reached US$129-B, much higher than US$43-B in the previous month.
In the 1st 10 months of F-Y 2011, which began in October 2010, the US federal government received US$1.89-T, but it spent US$2.99-T in the same period.
It is expected that this year's deficit is on pace to exceed last year's imbalance of US$1.29-T but fall short of the record US$1.41-T set in Y 2009.
Before Y 2009, the US federal deficit had never come close to US$1-T in any one year. The Soaring deficit has triggered increasing concern throughout the World.
Rating agency Standard & Poor's last Friday downgraded the US government's credit rating from AAA to AA+ for the 1st time in history, citing the World's largest economy's worsening fiscal prospect and less effective policy making mechanism.
In order to avert an unprecedented default crisis, the White House and the Republicans hammered out a deal at the end of last month to increase the country's legal borrowing limit and reduce the public debt in the next 10 yrs.
But the deal fell short of the US$4-T in cuts that Standard & Poor's said was needed to achieve a credible deficit plan.
According to the 2011 US Deficit Reduction Act, which was signed into law by US President Barack Obama on August 2, the federal government is expected to cut more than US$2-T spending in 10 yrs.
Currently, US federal public debt totals about US$14.4-T. Data from the International Monetary Fund (IMF)showed that the US debt to gross domestic product (GDP) ratio is over 99%, which is among the highest level in the developed countries.
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.