U.S debt dilemma, no better solution?

WASHINGTON, Oct. 17 (Xinhua) -- The U.S. government is without doubt facing great challenges, among which the debt dilemma is the biggest test.

The 1.42 trillion dollars federal budget imbalance of the fiscal year ending on Sept. 30 announced Friday is a so-called better-than-expected result. The figure, which tripled last year's record, deserves close attention.

As a proportion of the economy, the deficit accounts for about 10 percent, the highest it has been since the World War II. Earlier this year, the government had projected the ratio might reach about 12 percent.

For fiscal year 2009, the government collected 2.1 trillion dollars in revenues, a 16.6 percent drop from 2008, while government spending last year jumped to 3.52 trillion dollars, up 18.2 percent over 2008.

In its statement Friday, the Treasury Department estimated deficits would total 9.1 trillion dollars over the next decade unless corrective action was taken.

REASONS BEHIND THE INCREASE

The Secretary of Treasury Tim Geithner gave two reasons for the skyrocketing federal deficit.

Firstly, Geithner believed that the deficit was inherited from the George W. Bush administration.

The statement from the department said that "the 2009 deficit was largely the product of the spending and tax policies inherited from the previous administration."

Second, it was a result of the government's actions to tackle the worst economic recession since the Great Depression of 1930s.