February $223 Billion Budget Deficit Largest Ever

Tyler Durden's picture

Well, it's one way to start a deficit cutting scramble. Washington Times reports that the preliminary number for the February deficit, which will formally be released by the FMS shortly, is $223 billion: this is the largest single month deficit in history! So much for prudent budgets and all that. At least the number can only get better from here. Unless, of course, it gets much, much worse, and rates continue creeping higher, resulting in 30% of total revenues being dedicated to paying gross interest, as was previously discussed on Zero Hedge. Then 40%. Then 50%... One gets the picture.

From the Washington Times:

The federal government posted its largest monthly deficit in history in February at $223 billion, according to preliminary numbers the Congressional Budget Office released Monday morning.

That figure tops last February’s record of $220.9 billion, and marks the 29th straight month the government has run in the red — a modern record. The last time the federal government posted even a monthly surplus was September 2008, just before the financial collapse.

Last month’s federal deficit is nearly four times as large as the spending cuts House Republicans have passed in their spending bill, and is more than 30 times the size of Senate Democrats’ opening bid of $6 billion.

Senators are slated to vote this week on those two proposals — both of which are expected to fail — and then all sides will go back to the negotiating table to try to work out a final deal.

Remember, regardless how horrendous the numbers look, the US is neither Greece not Libya. For now.

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Herd Redirection Committee's picture

I remember back in 2008/ early 2009, the arguments about deflation/inflation.  Aaah, how quaint it seems now, looking back.  At the time it was talked about like deflation was the end of the world but now we get to feel the constantly tightening grip of (accelerating) inflation.  The argument at that time was that the Fed would not monetize the entire housing bust.  OK, maybe they were right about that, but most people completely missed the fact that the Fed would be monetizing MONTHLY federal deficits of $200 billion.  Zimbabwe, here we come.

Check out the latest from the Capital Research Institute: "The King is Dead, Long Live the (new) King":


What is happening right now in the world of finance can best be understood from the perspective of… succession planning? Thats right. What is underway right now has a lot in common with what used to happen every time a King’s reign was approaching its end, with the King on his death bed. Superficially everyone would still be following the King’s orders and scrambling around, summoning the finest physicians (somehow we got Timothy Geithner and Ben Bernanke), but just below the surface everyone knows the score, and is preparing for the King’s inevitable death. This leads to a tremendous amount of posturing and scheming, as everyone gets behind their preferred candidate to become the new King.

This is exactly what we witness in the world of international finance at the moment.

Thomas's picture

It starts adding up over the months. I am plowing through Meeker's 600 page report entitled, "America Is Soooo Royally Screwed." I won't give away the punchline.

markmotive's picture

We saw the punchline in 2010 when the Fed attempted to take away the punch bowl.

Markets tanked.

Lesson: the punchbowl must never be taken away...


asdasmos's picture

Realty Mogul, Sam Zell, Talks Inflation - says we're not seeing inflation because the CPI is distorted. (Mar. 3 2011)



Anaxagoras's picture

Tonight's Movie:

Dr. StrangeBen, or: How I Learned to Stop Worrying and Love Inflation

Check local listings, and pop up some popcorn to go with that Fed punch.

Poundsand's picture

Or how about this article in 2007?


The Congressional Budget Office estimated Friday that the U.S. federal budget deficit for fiscal year 2007, which ended Sunday, was about $161 billion, or 1.2% of gross domestic product. That’s down from the $248 billion shortfall recorded in fiscal 2006, which translated into 1.9% of GDP. The Treasury Department will report the official tally later this month.

Much of the improvement in the nation’s fiscal outlook in the last year has come from continued rapid growth in federal revenue. CBO estimates that 18.8% of GDP in fiscal 2007, up from 18.4% 2006 and 16.3% in 2004 and 18.4% in 2000. Outlays came to an estimated 20% of GDP, about equal to the average over the previous five years.

While annual federal spending grew 2.8% in fiscal 2007 over fiscal 2006, year to year, revenue grew 6.7%. Individual income-tax receipts are estimated to be 11.3% higher than last year, and corporate income tax receipts are estimated to be 5% higher. Revenue growth has cooled substantially from the 11.8% fiscal year-to-year increase from 2005 to 2006. Spending growth also slowed.

Federal expenditures were up in fiscal 2006 due to Gulf-coast hurricane recovery efforts. They were driven down in fiscal 2007 by legislation enacted in 2006 cutting student loan subsidies and auctioning off a portion of the broadcast spectrum, proceeds from which are recorded as negative expenditures not as revenues.

“While somewhat lower than estimates issued at the beginning of the year, the 2007 deficit announced today by the Congressional Budget Office is no cause for celebration,” said House Budget Committee Chairman John Spratt (D., S.C.)

CBO has estimated that if the U.S. maintains a military presence in Iraq and if Congress doesn’t allow the tax cuts enacted in President George W. Bush’s first term to expire, then recent improvements in the deficit will be reversed, pushing it up to to roughly $300 billion by 2012. – By John Godfrey




From the WSJ via Drudge today.


Note the last line, "pushing it to roughly $300 billion by 2012"  Dude, we are close to that per month!


Bring on QE7

Quixotic_Not's picture

A Kali/Joo Yawk house priced on bankster paper @ $1 mil, but only worth at best $333k based on median income/mortgage affordability?

No problemo!

We'll just have .GOV Sacks' U$ Trea$ury & FED Print-$erves create 3X the fiat currency from nothing, and voila!

Zee house is now worth $1 million in devalued currency...QE 1, 2, 3, 4, XXX to infinity and beyond!

And don't you pathetic serfs think about getting wages to match the unfortunate rise in commodites & cost of living...You wanted it, now you got it! Toyota!

Now, go sit in your McMansions, jerk each other off and die losers...

This nice inconvenient truth brought to you by your friendly (D) & (R) Oligarchy - Thanks for voting us in decade after decade!

Buck Johnson's picture

Your correct, they know this economic house of cards is dead and they are vying for position in the new economic model.  And in this model you can bet your last dollar that it won't have the US in any major role in it.

Montecarlo's picture

Good thing February was a short month!

jal's picture

how do you get a deficit without a budget and with the budget cuts in the extensions?


Zero Govt's picture

are Budget Deficits any way to lead a country???
Doesn't Washington DC realise if every business in the country followed their 'lead' Washington would have a country of deficit companies that pay no taxes!
..then Washington would have no income AND not be able to raise any debt because they had no income to repay it.
So when Washington raises the debt ceiling maybe every company should cook their books like the US Govt does and declare they're too unprofitable to pay taxes. How are your books looking now o'leader of change we can believe in?

Quixotic_Not's picture

are Budget Deficits any way to lead a country???

No, but it's ONE method used by Banksters to introduce newly mass-produced fiat currency into the "economy" when liquidity is at all time lows due to exhaustion of lower-middle class credit creation.

Unbelievable how transparent the Fraud St./District of Criminals plan is, yet how few actually GET it...

Got Ag?

Zero Govt's picture

Not sure how transparent their plan is, looks more like the usual State incompetence and corruption from here (did WS plan to go bankrupt or were they just too greedy and too stupid to stop themselves then needing 'old boy' chum Wank Paulson to bail them out of their shithole???)
No Ag but in Gold for the ride... i'm a deflationist so don't believe the currency will collapse for a few years yet, will buy Ag coins nearer the time

Abitdodgie's picture

are Budget Deficits any way to lead a country???

Please will people stop saying LEAD they are not our leaders , they are only representatives ( unfortunately) no more and no less

Zero Govt's picture

Sorry i'll try to whitewash all thoughts put there by incessant and relentless leftie US media propaganda that Obamma was the real and actual 2nd coming of Moses to lead the nation back to greatness ..quite clearly the bankers poodle wasn't the promised historical event

Sudden Debt's picture

if you think that's a lot...




BorisTheBlade's picture

Obviously, US$ 223 bln in February is US$ 7.964 bln deficit per day, since there are 31 days in March as opposed to 28 in February, March deficit should come close to US$ 246 bln assuming constant deficit of:

US$ 331.8 mln per hour

US$ 5.53 mln per minute

US$ 92 thousand per second (80% of households earn less than this amount in the entire year).

Almost a 100 dollar bill every millisecond, 24/7.

cougar_w's picture

What. Can't Von Bernankstein cover that much? $223B is chump change these days.

Sudden Debt's picture




Americans are such lucky bastards because they get all the gifts...

cougar_w's picture

... and I'm going to be right there on the street getting some when the BernankBucks are falling from the helicopters. Yeah baby!

Sudden Debt's picture

there are ways to get the advantage on that one:



make sure you have one near by ALL OF THE TIME!!

mochoajr's picture

As Charlie Sheen would say, "Winning!"

Hedgetard55's picture

When Bill Klintoon submitted his first budget the cry from the Republicans was "$200 billion dollar deficits as far as the eye can see". How far we have fallen since then. Prepare for Financial Armageddon and cannibalism like in "The Road".

kaiten's picture

Great to know that the recovery is well on track.

oddjob's picture

Change you can believe in.

docj's picture

Yep.  Nothing screams "RECOVERY!!" quite like "the largest monthly federal deficit in the entire recorded history of ever".

alexwest's picture

cant say better..

Zero Govt's picture

how's Obummas Committee of Fiscal Responsibility doing?

StychoKiller's picture

Disbanded (their checks bounced!)

Zero Govt's picture

so bonuses, perks and cushy pensions all round at the Committee for Fiscal Responsibility too ...these Big Govt jobs are just like Big Banking jobs now
red ink = bonanza bonuses

trav7777's picture

I disagree with one of the premises of the OP- this can certainly get worse, and it will.

Those deflationists who call for fiscal prudence...JFC, $6B?  It's amazing that they all say we simply MUST cut but nobody can come up with a single fking thing TO cut.  $61B for a year is called draconian.

Sudden Debt's picture

If you see what they can do with 61 billion, it makes you think what they did with the 223 billion.


Are they buying golden toilet seats for every government owned toilet?


Shameful's picture

Cuts are impossible in the US.  Look at the outrage over the WI thing.  Over what 160 million, not even drop in the bucket.  Spending will increase till the dollar finally gives up the ghost and they can't find a way to kick the can.  The only real game now is to see what order nations blow up in.

EscapeKey's picture

It's not an American thing. Gordon Fucking Brown raised the public sector spending from 35% to 53% of GDP here in the UK in 10 years, and the morons he essentially paid off to vote for him are now OUTRAGED the public sector has to be cut.

It won't be long before we'll see strikes, 3-day workweeks, and shortages. Oh, and rubbish all over Leicester Square, in a repeat play of the wonderful socialist 70'es.

overmedicatedundersexed's picture

escapek, but London flats are still hot ..RE market is booming and you get free "fish n chips" with each flat, Inflation is non existent in London as well we hear the mayor outlawed it last month.

Calmyourself's picture

Ha, trash in the square..  Perhaps worry a bit about hangings in the square as the Islamists take over in England.  A bit off topic but not much as we are talking financially overwhelming a society on one hand and out breeding the natives in another.

Jim in MN's picture

Cuts are possible, inevitable, and occurring.  The Badger State outrage has nothing to do with budget cuts.  The governor, in fact, refuses to discuss the actual budget. 

ColonelCooper's picture

The point is, that whether WI or US, we refuse to even discuss cuts.  (I understand the additional contentions in WI)  Wisconsin is just the first state blowing up in a series of lit fuses.

We cannot agree on 60,000,000,000 in cuts out of a 4,000,000,000,000 dollar budget? Start cutting out the zeroes and what do we have left? 6/400? 1.5%?  We honestly can't find a way to cut 1.5% out of the bloated piece of shit we call Washington?

Think Illinois will fare better? California?  Think Dayton is going to pull one out of his ass and get the legislature to balance shit out in a budget he'll sign?

The dominoes are wobbling at the very least.

Jim in MN's picture

State general fund expenditures are flat in real terms since 2000, and down substantially since 2008.  Federal funds and 'fees' have allowed some illusory spending levels to persist, but structurally the inflection point was reached a long time ago.  Politics tends to obscure this as it is not useful or sexy for political purposes.

But there is a difference between 'flat in real terms' and a 20-30% cut in real terms.  All I'm saying is there isn't a real way to avoid it and the numbers show it's already starting.  Public employee benefits will have to be part of the mix, but maybe less prisons, high school sports facilities and county highways to nowhere too....

ColonelCooper's picture

Agreed.  We need to sit down and really figure out what our priorities are, because we're broke.  MN is broke, US is broke, we're broke.

IMO, everything is on the table.  Public employee benefits, SS, Medicare, US Military,,, EVERYHING needs a haircut. We had better decide what is truly "essential", and get rid of the rest.  Until we collectively accept that, and are willing to have an honest discussion at all levels: our dinner tables, school board meetings, city halls, state capitols, and DC, we are going nowhere.

Personally, I have absolutely zero faith that we have the stones to pull it off.  We're gonna blow this SOB all to Hell, and have to crawl out of the rubble.  Maybe it's for the best, IDK.



euryale's picture

Nice work - biggest deficit ever during the shortest month. Sweet...

AN0NYM0US's picture

the winter weather in January resulted in the larger deficit in February with Easter late this year and Spring Break(s) underway, February will be the highmark for the year

Rainman's picture

...the Critters even took Prezident's week off and still set a world record. Very impressed... the auto-pilot works great.

Dick Darlington's picture

US of A is doing it the greek style. Triple A, loooooool!

Zero Govt's picture

look Timmay said Greece "couldn't possibly happen in America" alright?
Ok he admits his own budget is "financially unsustainable" but that's nothing like Greece, it's only the maths, deficit, debt and out-of-control Govt spending that looks 'a bit similar'

StychoKiller's picture

...it's only the maths, deficit, debt and out-of-control Govt spending that looks 'a bit similar'...

But aside from that, Mrs. Lincoln absolutely lovvvved the play!