US economy is going through the worse condition of the decade. The budget deficit climbed to 2.80 trillion in the last six months. This is the lowest foreign reserve in the history of the country. Treasury Department has predicted the deficit to be continued till September. The budget deficit is almost double as compared to last year’s trends. The economic department has reported the 65 billion deficits in July. However, the Trump administration is somehow managing all problems and predicting the bounce-back of the economy.
The main reason behind the economic deficit is the effect of coronavirus pandemic on the various economic forums. In July, the deficit is lower as compared to June as the government has collected the maximum amount of tax to generate good revenue in the economy. According to some reports, the government has collected USD 565 billion in the last month. The Americans are trying their best to overcome from economic recession.
Due to the pandemic, the US government has approved the various rescue packages worth approximately USD 3 trillion. But then also the opposition is demanding more relief packages. Last month President Trump passed the relief packages for unemployed people worth USD 400 billion. Due to the vast expenditure on relief packages, the economy is now suffering from an economic recession. The value of Dollars in the international market is going down day by day.
Comment of President Trump on the US economy
Last Saturday, during the press conference, the president addressed that the US’s economy is “amazingly” well and setting records in generating new jobs. He also adds that the unemployment rate is at the lowest as compared to the previous government. However, the economy experts are making a joke of the statement and addressing the president as dumb and foolish.
The senior economic advisor of president Trump Kevin Hassett has stated in an interview that the country’s economy is coming back way faster than it is expected. He also addresses that the economy would be hit back if the second wave of the pandemic has arrived in the country.
Position of Dollar in the international market
On Thursday, the dollar was in defensive mode against most of the currencies. The Chinese currency yuan jumps high against the dollar. Several experts have predicted that in the coming years yuan may overtake the dollar in the international market and establish itself as the central foreign currency exchange.
To tackle the problem, the government has approved the excessive flow of dollars in the international market to balance demand and supply. On the other side, the euro is also getting high growth as compared to USD. This is a real matter of concern.
However, several economic experts have predicted that the US’s economy is evergreen and will contain its value back in the international market. To revive the economy, it is necessary to discover the vaccine of coronavirus in the upcoming months.