With a 130% surge in spending, US posts record deficit due to COVID-19

The US Treasury Department said on Monday that a 130% surge in stimulus spending due to the COVID-19 pandemic resulted in the government posting a record deficit in the six months ended in March. 

As per the Treasury Department’s monthly report, the fiscal year-to-date deficit was a total of $1.7 trillion at the end of March 2021. In comparison, the deficit amount at end of March 2020 was $743 billion. 

A treasury official said while talking to reporters, “The effects of the pandemic, and the resulting decrease in employment, just started showing up at the very end of March(2020).”

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The deficit surged 454% to $541 billion for March 2021 alone as per the Treasury report. 

The official further explained that this resulted in “the year-to-date totals that were not significantly impacted at this point by the legislative and economic impact of the COVID-19 outbreak, whereas, this year, obviously were significantly impacted.” 

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The total spending saw a spike of just over $1 billion starting from October 2020 up to March 2021. The previous fiscal year ended just before the COVID-19 lockdowns or rescue packages were rolled out, reported AFP. 

A large number of unemployment benefits and cash payments were sent out last by the US government as part of President Joe Biden’s $1.9 trillion rescue package approved in March.