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Dec 6, 2009

US govt $403b in the red
Deficit for first two months of this fiscal year follows record shortfall last year



The scale of the deficit will make it hard for President Barack Obama to spend more to create jobs. -- PHOTO: AP

WASHINGTON - THE United States government has racked up a gaping shortfall in the first two months of this fiscal year after posting a record budget deficit last year, analysts said. In October and last month, it spent US$292 billion (S$403 billion) more than it took in, the Congressional Budget Office said last Friday. That was even worse than in the same period last year, when the government was on its way to posting a record US$1.4 trillion deficit for the fiscal year that ended Sept 30. The US federal budget has been battered by the worst economic downturn since the Great Depression of the 1930s, as tax revenues have plunged and spending on safety-net programmes like unemployment insurance has skyrocketed. The scale of the deficit will make it hard for President Barack Obama to spend more to create jobs, even as he comes under growing pressure to do more to boost the economy. Last Thursday, he hosted a job-creating forum to gather ideas from corporate executives, small business owners and other experts.

Reuters, AP