The Hindu Business Line : US budget gap balloons

WASHINGTON: The US budget deficit swelled by more than $400 billion in the first two months of fiscal 2009, almost the record gap of the prior year, Treasury data showed.

The federal deficit ballooned by a combined $401.57 billion in October and November, 2.5 times the size of the same period a year ago, the data showed on Wednesday.

The two-month deficit represents 88 per cent of the entire fiscal 2008 deficit of $454.79 billion, the highest on record. In November alone, the deficit widened 67.3 per cent from the same year ago, by $164.39 billion. November usually is a month of d eficit, the Treasury noted. But this fiscal year is marked by a deepening global financial crisis that has thrown, or is in the process of throwing, the US and other major advanced economies into recession.

The explosion in the public deficit in the past two months comes as the US government borrows and spends billions in an effort to unblock frozen credit and stimulate growth in the world's largest economy, which slid into recession a year ago. Some an alysts forecast the federal deficit will hit one trillion dollars this year. - PTI

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