The budget deficit in US swelled to a record $455bn in the fiscal 2008. A slowing economy which adversely affected revenues, spending on wars, bank failures and soaring unemployment related benefits have put pressure on exchequer.
These figures is a new record and broke the previous record of $413bn set in fiscal 2004, which was the fall out of tax cuts and massive spending on Iraq wars.
The Treasury's recent plan to spend $250 bn to buy preferred stock in financial institutions is a kind of cash outlay and will add to the budget deficit. But the program and expanded Federal Reserve lending operations also could produce some revenue gains.
