BY signing the much-needed, massive economic-stimulus package worth US$787bil into law over the week, US president Barack Obama has also brought in another huge challenge with which his administration would have to contend – the burgeoning fiscal deficit.
Fiscal deficit happens when the government’s expenditure exceeds its revenue. And for the US, the fiscal deficit could reach US$2 trillion or 14.5% of its GDP this year compared with around US$455bil or 3.3% last year. So, in the week ahead, Obama will be heading a “fiscal responsibility summit” to unveil a budget blueprint and address concerns over the country’s growing long-term debt situation.
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