U.S. federal budget deficit soars to record $3.1T

The federal budget deficit has hit an all time high of $3.1 trillion. Yahoo Finance's Rick Newman joins Akiko Fujita to discuss.

Video Transcript

AKIKO FUJITA: Numbers out on the federal budget deficit point to a new record. We're talking about $3.1 trillion as a result of government spending. During this pandemic, we've seen that go up as well. Let's bring in Rick Newman for the very latest on that front. And Rick, there's no question that we've seen record spending as a result of the pandemic. But we're also weeks away from an election where we're talking about even more spending with infrastructure. And so I mean, how should we be looking at this number? Do you think from an election standpoint, do voters care?

RICK NEWMAN: Well, the number is not a surprise. I mean we got the official number today. This was for the fiscal year, the government's fiscal year, which ends September 30. So this is for the 12 months that end September 30. Just to put this in context, the deficit in 2019 fiscal 2019 was only, I shouldn't say only, because it's a huge number, $984 billion. And the largest non war deficit ever was in 2009, when it was $1.4 trillion. So that was obviously at the bottom of the last recession, another year when there is a lot of stimulus spending.

But look, we went from the biggest deficit, annual deficit being $1.4 trillion in 2009, a sum that made some people gag back then. We went from $1.4 trillion again, to 3.1 trillion, so more than double the deficit from 2009. And we all know why this happened. I mean, it's because of those big stimulus bills, gigantic stimulus spending that happened in March and April.

So does anybody care? Yes, some people do still care about the debt. And there is a feeling amongst some people that the country is out of control in terms of federal spending. But look, economists, and we've had many on our shows, will tell you, yeah, that's an uncomfortably large amount of debt, but for the moment, it's better to be trying to keep the economy afloat and getting it to the other side of the COVID recession faster than it would otherwise get there, and deal with the debt later. The question is, will we deal with the debt later? And we keep saying we will, but we obviously haven't.

AKIKO FUJITA: Another issue that could keep voters away, the issue of corruption. And you're writing something on that. Comparing corruption between Joe Biden and President Trump. Walk me through your thesis.

RICK NEWMAN: Well, Joe Biden's son, Hunter Biden, is getting additional attention. I mean, we all know, the story here if you're following politics, that he got a sweetheart job with this energy company called Burisma in Ukraine from 2014 to 2019. He earned several million dollars from that gig. I mean, there's no question that he cashed in on the family name and that this was not the right thing to do.

But let's put this in the context of everything we know about Trump. I mean, if you really care about corruption and you want to go with which candidate is least corrupt, it's not even close. Trump, there are so many more warning signs in Trump world than they are in Biden world. I mean, it is, it's not, it's no comparison.

So just to wrap up on Burisma and Hunter Biden, a Senate Republican report, these people would have interest in putting Joe Biden in the harshest possible light, they investigated this. Their report, which came out a few weeks ago in September, found no wrongdoing by Joe Biden himself. I mean, there's just no evidence that Joe Biden did anything wrong. He's tolerated a conflict of interest he should not have, but he really didn't do anything wrong.

Let's look at Trump's record. He's being probed for tax fraud by authorities in New York state, in New York City. There's a watchdog group called Crew in Washington that has categorized 3,400 possible conflicts of interest, which in most cases, involve Trump family members, Trump himself and Trump cronies cashing in some personal way on Trump's role as president of the United States. I can see you nodding, Akiko. You're like, Rick, you can't, we don't have time to list the whole thing.

AKIKO FUJITA: Exactly, Rick! And this is where we tease your story.

RICK NEWMAN: The list of problems with Trump is enormous! So let's not pretend. Let's not create this false equivalency between Biden and Trump on corruption.

AKIKO FUJITA: It is a very long discussion, and our viewers can read your piece on yahoofinance.com.