WASHINGTON (AP) — The U.S. budget deficit totaled $2.77 trillion for 2021, the second highest on record but an improvement from the all-time high of $3.13 trillion reached in 2020. The deficits in both years reflect trillions of dollars in government spending to counteract the devastating effects of a global pandemic.
The Biden administration said Friday that deficit for the budget year that ended Sept. 30 was $360 billion lower than 2020, as a recovering economy boosted revenues, helping to offset government spending from pandemic relief efforts.
Before the deficit ballooned during two years of a global pandemic, the biggest deficit had been a shortfall of $1.4 trillion in 2009. At that time, the U.S. was spending heavily to lift the country out of a severe recession following the 2008 financial crisis.
As a percentage of the overall economy, as measured by the gross domestic product, the 2021 deficit represents 12.4% of GDP, down from the 2020 deficit, which was 15% of GDP.
The 2020 deficit was the highest in relation to the overall economy since World War II, when it hit 29.6% of GDP in 1943 as the United States was borrowing heavily to finance the war effort. Those figures remained elev