Deficit projected at $2.3 trillion for 2021, not counting additional stimulus, CBO says
The federal budget deficit is projected to total $2.3 trillion in the 2021 fiscal year, a drop from last year but well ahead of anything the U.S. had seen prior to the Covid-19 pandemic, the Congressional Budget Office reported Thursday.
That total does not include the $1.9 trillion in relief spending that President Joe Biden has proposed, because the ultimate size of the package has not been determined.
While smaller than the $3.13 trillion shortfall in fiscal 2020, the red ink this year still will be the second-largest in the nation’s history either in total dollar terms or as a proportion of the $20.9 trillion U.S. economy.
Biden says China will ‘eat our lunch’ after downplaying threat in 2019
President Biden warned that China will “eat our lunch” on Thursday after speaking with Chinese President Xi Jinping for the first time Wednesday night since becoming president – a sentiment that seemed to contradict some of his statements on the campaign trail.
“Last night I was on the phone with for two straight hours with Xi Jinping,” Biden told reporters in the Oval Office. “It was a good conversation, I know him well, we spent a lot of time together over the years I was vice president, but if we don’t get moving, they’re going to eat our lunch. They have major, major new initiatives on rail, they already have rail that goes 325 miles per hour with ease. They are working very hard to do what I think we’re gonna have to do.”
“The auto industry is already there. So is labor. They’re working very hard to try to move in a position where they end up being the source of a new way in which to power automobiles, which they’re going to invest a lot of money. They’re investing billions of dollars in dealing with a whole range of issues that relate to transportation and the environment … so we just have to step up,” Biden continued.
Gold price pressured by bearish outside markets
Gold futures prices are trading lower in early U.S. action Friday, due in part to bearish outside markets that include a firmer U.S. dollar index and weaker crude oil prices. Silver prices are a bit firmer. Both safe-haven metals have seen the upside limited this week by not much risk aversion in the global marketplace at present. April gold futures were last down $9.60 at $1,817.20 and March Comex silver was last up $0.093 at $27.14 an ounce.
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward weaker openings when the New York day session begins. Many Asian markets were closed late this week as the Chinese Lunar New Year holiday began, and markets will remain closed until the middle of next week. U.S. markets are closed on Monday for the President’s Day holiday. There is a bit more risk aversion late this week as the newer, highly contagious Covid-19 strain called the South African coronavirus has arrived in the U.S. This strain of the virus is also possibly more resistant to the vaccines. One news headline reads: “U.K. scientist warns new Covid variant will ‘sweep the world.’” Still, it can be argued a late-week pullback in the U.S. stock indexes is just a pause in a bull market run that has seen the indexes hit new record highs this week.