Tracking The Federal Deficit: June 2019
The Congressional Budget Office reported that the federal government generated an $8 billiondeficit inJune, theninth monthof Fiscal Year 2019, for a total deficit of$746 billionso far this fiscal year. If not for timing shifts of certain payments, Junes deficit would have been $57 billion, which is $28 billion larger than the adjusted deficit forJune 2018. Total revenues so far inFiscal Year 2019increased by3 percent , while spending increased by7 percent , compared to the same period last year.
Analysis of Notable Trends this Fiscal Year to Date: Individual and payroll taxes together rose by 3 percent , reflecting an expanding economy and a low unemployment rate. Furthermore, customs duties increased by 77 percent versus last year, primarily due to the imposition of new tariffs. On the spending side, Social Security expenditures increased by 6 percent compared to last year due to increases in the number of beneficiaries and the average benefit payment. Finally, net interest payments on the federal debt continued to rise, increasing by 16 percent versus last year due to higher interest rates and a larger federal debt burden.
Tracking The Federal Deficit: November 2021
The Congressional Budget Office estimates that the federal government ran a deficit of $193 billion in November, the second month of fiscal year 2022. This deficit was the difference between $474 billion of spending and $281 billion of revenue. Novembers deficit was 33% larger than the deficit recorded in November 2020. However, spending last November was artificially lowered by the fact that November 1 fell on a weekend, shifting $63 billion worth of payments into late October. If not for the timing shift, this Novembers deficit would have been 7% less than that of November last year.
Analysis of notable trends: Through the first two months of FY2022, the federal government has run a deficit of $358 billion$71 billion less than at this point last yearas spending rose 4% and revenues surged 24% this year, reflective of the nations ongoing economic recovery.
What Is A Cds Spread
Credit default swaps are a type of derivative that provides a lender with insurance in the event of a default. The seller of the CDS represents a third party between the lender and borrower .
In exchange for receiving coverage, the buyer of a CDS pays a fee known as the spread, which is expressed in basis points . If a CDS has a spread of 300 bps , this means that to insure $100 in debt, the investor must pay $3 per year.
Applying this to Ukraines 5-year CDS spread of 10,856 bps , an investor would need to pay $108.56 each year to insure $100 in debt. This suggests that the market has very little faith in Ukraines ability to avoid default.
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Tracking The Federal Deficit: July 2020
The Congressional Budget Office estimates that the federal government ran a deficit of $61 billion in July, the tenth month of fiscal year 2020. Although this Julys deficit was actually smaller than last Julys $120 billion deficit, the change does not represent an improved fiscal condition but a mere timing shift. The deadline for non-withheld individual and corporate income taxes, normally in April, was delayed until July of this year, causing an unusual spike in July revenue . Even this influx of taxes was overcome by monthly outlays that, at $624 billion, were 68% greater than last Julys. The cumulative budget deficit for FY2020 now stands at $2.8 trillion, more than triple the deficit at this point last year.
Analysis of notable trends: Stepping back from monthly fluctuations caused by the change in filing deadlines, total revenue so far this fiscal year is down 1% from this point last year. Revenues through this March had actually been 6% higher than through the same point last fiscal year, as higher individual and corporate earnings led to greater individual and corporate income tax receipts. Then the pandemic hit. From April through July, revenues are 10% lower than over same months last year, a combination of economic damage and legislation that gave individuals and corporations greater tax deductions.
Interest Expense On The Debt Outstanding
As of June 6, 2022, this data moved permanently to FiscalData.treasury.gov, where it is available for download in multiple machine-readable formats with complete metadata!
The Interest Expense on the Debt Outstanding includes the monthly interest for:
- State and Local Government series and other special purpose securities.
Amortized discount or premium on bills, notes and bonds is also included in the monthly interest expense.
The fiscal year represents the total interest expense on the Debt Outstanding for a given fiscal year. This includes the months of October through September.
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Why The Federal Reserve Owns Treasurys
As the nation’s central bank, the Federal Reserve is in charge of the country’s credit. It doesn’t have a financial reason to own Treasury notes. So why does it?
The Federal Reserve actually tripled its holdings between 2007 and 2014. The Fed had to fight the 2008 financial crisis, so it ramped up open market operations by purchasing bank-owned mortgage-backed securities. The Fed began adding U.S. Treasurys in 2009. It owned $1.6 trillion, by 2011, maxing out at $2.5 trillion in 2014.
This quantitative easing stimulated the economy by keeping interest rates low and infusing liquidity into the capital markets. It gave businesses continued access to low-cost borrowing for operations and expansion.
The Fed purchased Treasurys from its member banks, using credit that it created out of thin air. It had the same effect as printing money. By keeping interest rates low, the Fed helped the government avoid the high interest rate penalty it would incur for excessive debt.
The Fed ended quantitative easing in October 2014. Interest rates on the benchmark 10-year Treasury note rose from a 200-year low of 1.43% in July 2012 to around 2.17% by the end of 2014 as a result.
The Federal Open Market Committee said the Fed would begin reducing its Treasury holdings in 2017. But it purchased Treasurys again just a few years later.
Tracking The Federal Deficit: July 2021
The Congressional Budget Office estimates that the federal government ran a deficit of $301 billion in July, the tenth month of fiscal year 2021. Because August 1 fell on a weekend in both 2020 and 2021, certain federal programs that typically pay out large sums on the first of the month did so twice in July. If not for these timing shifts, the deficit would have been $60 billion less last month. Julys deficit was the difference between $261 billion in revenue and $562 billion in spending. Monthly receipts dropped 54% compared to last July due to 2021s return to the regular April and June tax filing deadlines for individual and corporate tax payments.
So far this fiscal year, the federal government has run a cumulative deficit of $2.5 trillion, the difference between $3.3 trillion in revenue and $5.9 trillion in spending. This deficit is 10% lower than over the same period in FY2020, but nearly triple the FY2019 deficit .
Analysis of Notable Trends: Fiscal patterns over the past month continue to reflect the federal governments response to the COVID-19 pandemic, as well as the developing economic recovery.
Growth in federal revenues remains robust, increasing 17% compared to the same 10-month period in FY2020. This increase is indicative of a strengthening economy, with a steady inflow of individual income and payroll taxes from higher total wages and salaries, and corporate taxes from larger corporate profits, the latter of which increased 76% year-over-year.
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Tracking The Federal Deficit: April 2019
The Congressional Budget Office reported that the federal government generated a $161 billion surplus in April, the seventh month of Fiscal Year 2019, for a total deficit of $531 billion so far this fiscal year. Aprils surplus is 33 percent less than the surplus recorded a year earlier in April 2018. If not for timing shifts of certain payments, the surplus would have been 5 percent smaller than the surplus in April 2018. Total revenues so far in Fiscal Year 2019 increased by 2 percent , while spending increased by 6 percent , compared to the same period last year.
Analysis of Notable Trends this Fiscal Year to Date: Income tax refunds were down by 5 percent compared to last tax season, contrary to many analysts expectations. Further, outlays from the refundable earned income and child tax credits increased by 12 percent versus last year, reflecting expansions enacted in the Tax Cuts and Jobs Act of 2017. Net interest payments on the public debt continued to rise, up 13 percent compared to last year, largely as a result of higher interest rates and the nations steadily growing debt burden.
Major Events And The Impact On Us Debt
It helps to consider the national debt in context. During times of war, the U.S. increases military spending. When the economy is down, the federal government uses spending and tax cuts to spur growth. When these expansionary fiscal policies boost economic growth, higher tax revenues can be used to pay back the debt.
Here’s a timeline of the national debt by year, and how it compares to national events.
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America’s $28t Debt Explained In One Chart
In response to the pandemic, the U.S. Government initially sent $2T of stimulus into the economy. Nearly a year later, theyre readying another set of relief money. Everything from direct payments to workers, guaranteed loans to small businesses, and unemployment benefits are on the table. All the activity from the first bill has been adding to the national debt, which as our latest visual illustrates, has been exploding for years. And this next bill could accelerate the move. You can check out the U.S. debt clock in real-time here.
- For the first 50 years in our visual from 1929 until 1979, the U.S. national debt only grew gradually. It was just $16B in 1929 or about 16% of GDP, rising to $827B or 31% of GDP in 1979.
- Debt levels started to explode during the 1980s and 1990s, rising from $908B when Volcker raised the Fed rate to 20% to tame inflation to $5.6T when the Glass-Steagall Act was repealed in 1999.
- In the late 1990s, the growth of the national debt slowed down. The U.S. government actually ran a surplus in 2000, and the debt decreased as a percentage of GDP from 65% in 1995 to 55% in 2001.
The U.S. debt resumed its skyrocketing trajectory with the War on Terror, the Great Recession, and now the Coronavirus crisis. It already hit 127% of GDP in Q3 of 2020 and is projected to double to 202% by 2051.
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Cryptocurrencies Go Mainstream & Tax Reform
This was the year that Bitcoin and other cryptocurrencies reached a level where awareness really spread among ordinary people not just those seeking a means of keeping transactions out of the central banking system.
This was also the year for the first major tax reform in nearly three decades. The Tax Cuts & Jobs Act of 2017 cut taxes for corporations and individuals, giving the country a short-term economic boost.
National Debt: $20.245 trillion
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Tracking The Federal Deficit: March 2019
The Congressional Budget Office reported that the federal government generated a $149 billion deficit in March, the sixth month of Fiscal Year 2019, for a total deficit of $693 billion so far this fiscal year. Marchs deficit is 29 percent less than the deficit recorded a year earlier in March 2018. If not for timing shifts of certain payments, the deficit would have been 9 percent smaller than the deficit in March 2018. Total revenues so far in Fiscal Year 2019 increased by 0.6 percent , while spending increased by 5 percent , compared to the same period last year.
Analysis of Notable Trends this Fiscal Year to Date: Customs duties increased by 86 percent compared to last year. On the spending side, outlays for Social Security, Medicare, and Medicaid increased by a combined 4 percent . Department of Defense spending rose by 9 percent , and net interest payments on the national debt were up by 13 percent , largely due to interest rates on short term debt being substantially higher now than they were during the first half of Fiscal Year 2018.
The National Debt In Perspective
Consider what it means when the graph says 100%. It means the national debt equals one year of Gross Domestic Product . So if we used the full value of what the US produces for one year just to pay off that debt, that would just do it. And 50% means the debt would be paid off in six months of using the full output.
That sounds outlandishly huge, but consider a family making $100,000 a year that buys a $250,000 house with 20% down and takes a $200,000 mortgage. No one considers this unusual or risky. But that family would be off the top of the graph at 200%. It would take all they made for two years to pay off their debt. And the US has a slight advantage over most families. It can print money. So there is zero chance of default.
And only about 1/4 of the national debt is owed to foreigners. Another 40% is owed to Americans, for example, pension plans own quite a bit of it. And the rest is owed by the US governments General Fund to other Government Trust Funds, like the Social Security Trust Fund and the militarys pension fund.
Click for an explanation of the Green Line, balanced budgets, tax cuts and a bit of Keynesian stimulation.
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Check Out: Biden Vs Trump Latest Polls
But come on. Nobody really believes such nonsense, least of all our presidents. Well, maybe you should watch this eight-second video from 2006.
Yes, thats George Bush II. By 2006 he should have known better. One month after taking office in 2001 with a plan to cut taxes, he said he would retire nearly $1 trillion in debt over the next four years. the largest debt reduction ever achieved by any nation at any time. Instead, the national debt went up by $2 trillion. But he remained under the spell of voodoo economics.
The same thing happened to him as to Ronald Reagan. He cut taxes, believed tax revenues would increase, but surprise tax revenues went down. So the government had to borrow more. And the Debt, which had been going down, suddenly shot up. Once again it grew even faster than the economy and thats why you see the graph going up in his first budget year.
Fool me once, shame on you. Fool me twice shame on me. Should we go for three times? You would think that after 20 years of Voodoo experiments turning out just like any sane person would expect, that at least the best and brightest Republicans would catch on. So here we are in 2015. Trust me again for 14 seconds and listen to Fiorina and Rubio:
As Carly says, this may seem crazy to you. But here are two of the brightest contenders in the 2016 Republican primaries repeating the same old Voodoo. When it comes to the debt, the GOP is the party of zombies.
The Types Of Presidential Decisions That Impact National Debt
Presidents can have a tremendous impact on the national debt. They can also have an impact on the debt in another presidentâs term. When President Trump took office in January of 2017, for the first nine months of his presidency, he operated under President Obamaâs budget which didnât end until September, 2017. So for most of a new presidentâs first year in office, he isnât accountable for the spending that takes place. As strange as this may seem, itâs actually by design to allow time for the new president to put a budget together when in office.
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Tracking The Federal Deficit: May 2021
The Congressional Budget Office estimates that the federal government ran a deficit of $132 billion in May, the eighth month of fiscal year 2021. Mays deficit was the difference between $463 billion of revenue and $596 billion of spending. To note, May spending was impacted by May 1 falling on a weekend, shifting certain payments into April that are normally paid at the beginning of May. If not for these timing shifts, the May deficit would have been $192 billion.
So far this fiscal year, the federal government has run a cumulative deficit of $2.1 trillion, the difference between $2.6 trillion of revenue and $4.7 trillion of spending. This deficit is 10% greater than at the same point in FY2020when only three months of pandemic-related spending had occurredand 179% greater than at this point in FY2019.
Analysis of notable trends: The pandemic response continues to disrupt normal spending and revenue patterns. Individual income taxes are usually paid in April however, in both 2020 and 2021, the federal government pushed back Tax Day due to COVID-19. This year, individual income taxes were due on May 17, compared to July 15 in 2020. Additionally, this year, estimated quarterly tax payments were due in April, whereas they were due in July in 2020. These shifting dates must be taken into account when considering year-over-year deficit comparisons.
Tracking The Federal Deficit: February 2020
The Congressional Budget Office reported that the federal government generated a $235 billion deficit in February, the fifth month of fiscal year 2020. Februarys deficit is a $1 billion increase from the $234 billion deficit recorded a year earlier in February 2019. Februarys deficit brings the total deficit so far this fiscal year to $625 billion, which is 15% higher than the same period last year . Total revenues so far in FY2020 increased by 7% , while spending increased by 9% , compared to the same period last year.
Analysis of Notable Trends inThis Fiscal Year to Date: Through the first five months of FY2020, individual income tax refunds fell by 6% , increasing net revenue, as the timing of refund payments varies annually. Customs duties rose by 14% , partly due to tariffs imposed by the current administration, primarily on imports from China. On the spending side, net interest on the public debt increased by 6% even amidst historically low interest ratesbecause the overall debt burden has risen. Outlays for the Department of Veterans Affairs rose by 7% because of rising participation in veterans disability compensation, growing average disability benefits, and increasing spending on a program that helps veterans receive treatment in non-VA facilities.
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