U.S. Budgt Deficit Worth 1 Trillion

The U.S. recorded a gigantic budget deficit of nearly $1 trillion in the first six months of this fiscal year which began on October 1.

The estimates released on Monday by the Congressional Budget Office said the government likely recorded $953 billion in red ink from October through March.

WHY DEFICITS MATTER

• Increased debt costs for government
• Increased risk of inflation
• Long-term pressure on dollar
• Could lead to higher taxes and spending cuts later

The CBO, the nonpartisan budget analyst for Congress, said the drop in corporate receipts was the largest in more than three decades.
In addition to dropping revenue and the bailout money for Wall Street, the government has poured more money out the door to try to jump-start the ailing economy, which has been in recession since December 2007.

An arm of the U.S. Treasury Department also loaned $10 billion to credit unions to help them address recent liquidity pressures, the CBO said.

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