Federal budget deficit hits new high

Oct 15, 2008 @ 1:45 pm

By Erin Yerke

The federal budget deficit for fiscal year 2008 was reported today at a record $455 billion by the Department of the Treasury.

Coming in at more than double last year’s deficit, it was $65 billion over the estimate from the Treasury’s July mid-session review.

The deficit accounts for 3.2% of gross domestic product and surpasses the previous record deficit of $413 billion in 2004.

Stimulus tax rebates, the $700 billion financial services industry bailout, and increased spending in the Middle East are responsible for the spike, according to the Department of the Treasury.

And the worst may not be over: Further government action to stabilize markets will result in lower revenues and increased spending, causing a deficit of more than $500 billion in fiscal year 2009, some analysts say.

Some believe the deficit could run as high as $1 trillion, according to published reports.

“We are taking aggressive actions to stabilize our financial markets and strengthen our financial institutions so they can finance economic growth,” Treasury Secretary Henry Paulson said in a statement yesterday.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

Events

Cybersecurity threats advisers are seeing right now

The key threats advisers are seeing right now seem to change daily. Michelle Thetford of Schwab Advisor Services explains how to protect yourself and your clients.

Latest news & opinion

Alternative strategies boomed after crisis, but haven't been tested

Because the S&P 500 has outperformed, convincing clients they need protection is a hard sell.

7 ways advisers fixed clients' biggest financial dilemmas

Sometimes it takes creativity, along with knowledge and outside help, to get a client out of a jam.

LPL Financial buys NPH, a broker-dealer network with 3,200 advisers

The deal, part of which is based on the advisers and revenue that eventually will move from NPH, could potentially cost LPL $448 million.

3 things advisers should make sure their clients' children take to college

Advisers can help clients avoid scary and painful situations with kids age 18 and older.

Private equity investors zero in on the RIA business

P-E proves to be ready and willing to invest in RIAs, but many will be looking to sell in three to seven years.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print