The deficit in September, the last month of the fiscal year widened to 64.57 billion dollars from the same month last year, but amounts to several billion dollars less than economists had expected. The annual deficit was 1.299 trillion, compared with 1.294 trillion in fiscal 2010.
The U.S. economy, the world's largest, has escaped the crisis of sovereign debt in the euro area pain is now suffering, even if the deterioration of its financial policy has troubled domestic politics.Many experts maintain U.S. growth and weak job market requires a disastrous short-term fiscal stimulus, or at least reluctance to implement the cuts.
President Barack Obama has proposed a $ 447 billion to create jobs, but was rejected by the Senate this week and now lawmakers are trying to pick up the pieces.Republicans in Congress have pushed hard for deep cuts to close the fiscal gap.While the budget deficit has increased in dollar terms in the last fiscal year, it reduced to 8.7 percent of the US GDP by 9 percent in fiscal year 2010. Economists say that GDP is a metric gauge more significant than the size of the budget deficit measured in dollars.
US GDP grew less than 1 percent in the first half of the year, while unemployment has remained above 9 percent for several months, raising fears of a recession. These concerns recently prompted Ben Bernanke, Fed chairman, to warn lawmakers in his testimony earlier this month that cuts in public spending in a time of fragile recovery can be dangerous.
"(A) of the factors that may weigh on the U.S. recovery is the resistance shall be exercised by the public," Bernanke told the Joint Economic Committee of Congress.Even when he called for steps to bring long-term deficits under control, the Fed chief urged lawmakers "to avoid the tax measures, which could hamper economic recovery."
After the fiasco of the debt ceiling in August, Congress created a special panel task deficit to reach an agreement to cut 1.2 trillion dollars over the next ten years by November 23 if they fail, will automatically be triggered budget cuts from 2013, which would cut funding to agencies and programs selected from across the board, and defense spending affected.
