WORLD> America
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WORLD> America
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US budget deficit swells to record $455 billion
(Agencies)
Updated: 2008-10-15 15:47 He told reporters on a conference call that the budget trend would likely follow the July assumptions for a higher budget deficit in fiscal 2009 and declines after that, but actual estimates had not been revised. "Budget projections are inherently inaccurate even six months out and if you're projecting two, three, four, five years in the future, there is a big margin for error," McMillin said. Asked about analysts' projections about 2009 deficits of $500 billion to $1 trillion and beyond, McMillin said: "I'd say the upper end of the estimate is pretty darn pessimistic." Deficit as Percent of GDP Seen Rising The fiscal 2008 budget deficit was estimated at about 3.2 percent of gross domestic product, compared with 1.2 percent of GDP in fiscal 2007. Among recent years, the deficit-to-GDP ratio had reached 3.6 percent in 2004, and 4.7 percent in 1992 as the United States dug itself out of the 1990-91 recession. "This year's budget results reflect the ongoing housing correction and the manifestations of that in strained capital markets and slower growth," US Treasury Secretary Henry Paulson said in a statement. "We are taking aggressive actions to stabilize our financial markets and strengthen our financial institution so they can finance growth." The Treasury said outlays by the Federal Deposit Insurance Corp were $18.2 billion for the year, which was $15.2 billion above its July estimate, because of the failures of IndyMac Bank in California and smaller depository institutions. Defense Department expenditures were $595 billion, exceeding July estimates by $12.5 billion due to outlays for war-related operation and maintenance costs. For September, normally a big surplus month because of quarterly corporate tax revenues, the Treasury reported a $45.7 billion surplus, compared with a $112.87 billion surplus in September 2007. Analysts polled by Reuters had forecast a $70 billion surplus for the month. |
