Treasury expects to borrow $3 trillion over next 3 months
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The Treasury Department says it’s going to borrow about $3 trillion over the next three months. That’s almost triple what the Treasury borrowed for all of the 2019 accounting year.
So, why do we need to borrow so much right now?
The Treasury needs the money to pay for all of the new stimulus spending to keep the economy afloat during the COVID-19 crisis. So far, Congress has authorized more than $3 trillion in relief spending. Some of that money is being used for direct payments to Americans below certain income thresholds, and the expansion of unemployment.
The money is also being spent on small business loans and aid to hospitals. Plus, the Treasury is backstopping the Federal Reserve’s efforts to shore up the economy.
The only way to pay for this is more borrowing because the deficit was already expanding before the coronavirus crisis hit — to pay for things like the 2017 tax cut.
Plus, the federal government postponed the tax deadline to July, so it’s not getting its usual April tax payments. Congress is also considering another financial aid package.
On Monday, the Treasury said it expects to borrow another $677 billion this summer.
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