Market Brief from First Capital Mortgage
A Message from Jay Robertson – President of First Capital
Date: October 14,2011
The government’s gap between spending and income remained above $1 trillion for the third straight year in 2011, according to fresh government data.
The Treasury Department on Friday reported the nation’s budget deficit in the 12 months ended Sept. 30 was essentially unchanged at $1.29 trillion from the year before.
In nominal terms, the deficit inched higher by $4 billion or 0.3% this year. It was the second largest deficit on record.
However, the deficit shrank as a proportion of the economy. The deficit narrowed slightly to 8.7% of gross domestic product in 2011 from 9.0% in 2010.
In a statement, Treasury Secretary Timothy Geithner said that the deficit remained elevated as a result of the continued effects of the financial crisis in 2008 and 2009, “which have put a persistent strain on revenue and outlays.
The economy has sputtered to a crawl in the last six months.
Without any further changes to government programs, the Obama administration expects the deficit to narrow by 26% in 2012 to $956.4 billion, according to the mid-session budget review released in early September.