The U.S. Treasury Department says it might want to borrow a record $2.99 trillion throughout the present April-June quarter to cowl the price of varied rescue efforts coping with the Corona Virus pandemic.
Treasury stated Monday that the $2.99 trillion it plans to borrow this quarter will far surpass the $530 billion quarterly borrowing it did within the July-September 2008 quarter because it handled the 2008 monetary disaster.
The extraordinary sum of $2.99 trillion of borrowing in a single quarter dwarfs the $1.28 trillion the federal government borrowed within the bond marketplace for all of 2019.
Treasury stated the large sum is required to fund the nearly $3 trillion the federal government has permitted in varied applications to help staff and companies with direct financial funds, the Paycheck Protection Program and different efforts.
In addition, the federal government must borrow to cowl the shortfall in income that may happen as a result of the Trump administration has delayed the deadline for tax funds this yr from April to June.
In a stark demonstration of how the federal government’s monetary scenario has modified, three months in the past earlier than the virus precipitated widespread shutdowns within the United States, Treasury was projecting that it could be capable of pay down $56 billion in debt throughout the quarter quite than borrowing an extra $2.99 trillion.
Treasury projected that it must borrow an extra $677 billion within the July-September quarter.
The Congressional Budget Office is forecasting that the federal government will run a record price range deficit of $3.7 trillion this yr. CBO is projecting the general economic system will shrink by a record 40% at an annual fee within the present April-June quarter.