US deficit reaches record $1.4 trillion

October 9, 2009

According to the US Congressional Budget Office (CBO), the US budget deficit reached a record $1.4 trillion in the fiscal year to September 30.

The deficit was about 9.9% of the country's GDP, over three times the level in 2008 and the highest since the Second World War ended. Economical analysts had initially predicted a deficit of $1.6 trillion.

The deficit was blamed on decreased tax revenues and higher government spending. The CBO also said on Wednesday that tax revenue dropped by 17%, or $420 billion, to its lowest level for over half a century.

The previous record deficit was in 2008, at $459 billion.