According to the latest report of China News Service on September 12,Data released by the U.S. Treasury Department this Friday showed that the 2020 fiscal year (2019 (October 1 to September 30, 2020) In the first 11 months, the U.S. government’s fiscal deficit has exceeded 3 trillion U.S. dollars to reach 3.007 trillion U.S. dollars, a surge of 200%from the 2019 fiscal year, the highest ever.
According to past experience, companies usually delay paying taxes until the end of the quarter, so September has always been the month of US budget surpluses. Many people still hope that there will be a fiscal surplus in September to make up for the United States’ record fiscal deficit. However, a representative of the Ministry of Finance revealed that whether the fiscal situation in September this year was in surplus or deficit is still unknown.
In the past six months, the United States has allocated nearly $3 trillion in financial allocations to help stimulate local economic development to fight the epidemic. To make matters worse, most of the aid projects, such as small business subsidies and an additional $600 unemployment benefit, expired in early August. As of September 10, there are 13.385 million unemployed people and many small businesses in the United States who are waiting to be fed. In other words, the United States still needs to spend a lot of money to help the economic recovery of all walks of life, which will continue to worsen its fiscal deficit.
According to the Global Times, economists analyzed that The sharp increase in the deficit will greatly increase the risk of US debt default. Many overseas holders of U.S. debt are gradually reducing their holdings of U.S. debt in order to avoid the United States from”repudiation.” Data from the US Treasury Department shows that from January to June this year, China has sold a total of US$106 billion in US debt. Xi Junyang, head of the Department of International Finance at Shanghai University of Finance and Economics, predicted that China may continue to sell US$200 billion in US debt in the future.
According to incomplete statistics, in addition to China, there are also Russia, Germany, At least 40 countries, such as the United Kingdom and Japan, have promoted their country’s de-dollar process by selling U.S. debt and increasing non-dollar currency reserves. Statistics show that central banks around the world have continued to reduce their holdings of U.S. debt for 22 consecutive months, with a cumulative sell-off of as much as US$800 billion.
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