Federal Deficit Spending Passes Alarming Levels

It seems that the “Treasury Budget” is in need of a name change just like the “Trade Balance” has seen.  We can all finally start to formally call both of these “Deficits.”  The “Budget Deficit” for May 2009 came was $189.65 billion.  To date, we are sitting on a deficit of $991.95 billion for all of 2009.  That is as of end of May, so as of June 10 we are now already at $1 trillion… There does not appear to be much help on the horizon.

For a comparison, the May, 2008 deficit was $165.93 billion.  The difference is that this May’s deficit looks to be the largest deficit for any May in U.S. history.  For another comparison, for the same fiscal eight-month period a year ago the deficit was “only” 319.4 billion.  We are now already at double the entire 2008 deficit of $454.8 billion.

Spending is not the only issue here.  Gross receipts are far lower because of weaker earnings and because of weaker payroll numbers.  The revenues year-to-date were $1.37 trillion, down from $1.67 trillion for the same time period in 2008.  For May, the federal government receipts came to $117.2 billion.  Unfortunately, that is down from from $124.3 billion a year ago.

May federal government spending totaled $306.89 billion, compared to $290.20 billion in May 2008. The federal government spending for the 2008 fiscal year has totaled $2.37 trillion, compared with $1.99 trillion in the first eight months of fiscal 2008.

Much of this is easy to see where it went: we have spent over $177 billion for the TARP and over $65 billion for jobless benefits.  The interest on the debt has already cost an astonishing $132.5 billion, and defense spending sits at $438.79 billion for the year so far.

It is easy to point the finger at the bailouts and at other areas.  But the receipts are down because times are hard.  Spending is up on what looks to be everything.

When referring to economic data in the U.S., the word “balance” is getting easier and easier to just add in the word “deficit.”   Traders have used this term for years.

A billion dollars just is not what it used to be.  But a trillion, that is still real money.

Jon C. Ogg
June 10, 2009