$1.29 Trillion Deficit Experienced in Fiscal 2010

Added by Gary Dunn on October 17, 2010

The Treasury Department revealed on Friday that the budget deficit for fiscal year 2010 decreased from 10 per cent in 2009 to nearly 9 per cent of gross domestic product for the fiscal year that just ended on September 30.

The department also said that this was due to the recovery of tax collections and bailout spending which fell sharply, further adding that this year’s budget deficit amounted $1.294 trillion as compared to 2009’s $1.416 trillion deficit.

This is termed by the government as being the biggest improvement in deficit to gross domestic product since fiscal 1987.

Global Head of Foreign Exchange Market Strategy at the Deutsche Bank in NY, Alan Ruskin, said that the gap is still large and therefore doesn’t affect fiscal consolidation that much.

Ruskin added that there would have to be about 6 per cent differences before any improvements can be noted.

During congregation election held in November, there was a lot of criticism towards Barack Obama’s expenditures as most of the republicans present termed it as “reckless.” Democrats countered the criticism saying that the President’s spending was meant to protect fiscal’s reputation and avoid economic down turn.

Tom Price, leader of a conservative group of House Republicans in Georgia, said that it was the congress’ responsibility to cut down expenditures so as to balance the budget.