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October Monthly Government Deficit At $176.4 Billion, Receipts Of $135 Billion At Seven Year Low
According to the latest Monthly Treasury Statement, the US economy continues melting away as receipts are nowhere near to funding outlays, meaning more and more debt has to be used (and more and more interest expense has to be paid as a result). The deficit last month of $176 billion was $20 billion worse than a year ago, and is the single worst October reading in US history. The number was a function of $312 billion in outlays and just $135 billion in receipts, an 18% decline YoY, and also the weakest reading for the month of October since 2002. The $176 billion deficit represents a new downward inflection point as it was worse than both the CBO's expectation ($175) and the consensus estimate of $165.9 billion. Most interesting is the amount of interest on US debt paid: in October the government paid out $17.93 billion of net interest expense, $1 billion lower than the $18.98 billion spent in October 2008. The question of what happens to this number once the Fed stops monetizing the debt and keeping rates artificially low stands open.
Of the total outlays, the number one use of cash continues to be National Defense at $70 billion in the month. Number two and three were the sink holes of Social Security and Medicare, at $57 and $52 billion, respectively. Ironically the amount of receipts would have barely been able to cover just these two items, let alone the other $300 billion in outlays in the past month.
Full Treasury release below:
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http://www.youtube.com/user/theonion?blend=1&ob=4
want one!
how about those personal income tax receipts down 30% y\y and the net credit for corporate income tax. Dept labor has a 100% plus pickup in unemployment insurance...mere rounding errors that 20% increase in interrst on treasury debt
Has anyone else noticed the complete absence of any discussion of the upcoming Christmas season on CNBS or the other so-called financial TV networks? Other than the occasional lip service paid to Christmas being around the corner, nothing.
I remember last year at this time we were bombarded with open discussion as to whether or not the consumer would show up for Christmas. Black Friday, the day after Thanksgiving, is usually discussed endlessly in the weeks before. At least they were talking about it last year. Here we are two weeks away and nothing.
Is that a leading economic indicator? Just asking.
Black Friday, indeed.
The cash flows that lie behind the dollar and our Treasuries are drying up. I've started to see the 20% figure everywhere. Jobs, ad spending, revs, and so on. It looks to me like 1/5th of the US economy is gone.
G
"The question of what happens to this number once the Fed stops monetizing the debt and keeping rates artificially low stands open."
If that happens, 1 ounce of Gold will buy the Dow.
Individual income taxes down 29% year over year, yet employment is only down 5% from the same period. What am I missing? Could it be a whole ton of lost income from owners of S Corps?
S corps and 1099 contractors.
But of course the birth/death model (am I allowed to use the word "death" anymore on this site??) assumes small businesses added jobs over this depression.
explains some of the hosuhold job tankage vs. the nonfarms. perhaps.
It could also be lower withholding by owners of S Corps that can no longer get financing from traditional sources.
Right and wrong all !!
It's about the FURLOUGHS . Those pesky public....and now private....pay cuts of 10-15 %.
No payee, no taxee.
You can't 'hope away' these numbers, folks. Add the underemployed and people working for lower wages to the list of reasons why individual receipts are down.
Join the holiday season buying boycott, and help further starve the beast.
Or could it be people pissed off at how the government wastes their money finally reaching the tipping point?
Scary...Real income is necessary to pay debt and taxes.
Duh, yeah, that's where the lying hits the wall, ie underreporting unemployment for at least 16 months. It all comes out eventually.
Unlike so many other survey-based statistics the government collects, models, analyzes, cleans and publishes, tax receipts are what they are. No further interpretation necessary. Equally fascinating (and disturbing) at the state levels.
Seeing that $135 billion will require a new set of adjectives to be utilized in describing economic performance, what must Congress and the Treasury be thinking at this very moment?
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aTf1t2erpN30
More tax breaks for bankers -- time to explore the nether-reaches of trickle-down economic theory, I guess.
Marxism is in denial of it's terminal condition. Will it lash out as it goes through it's last years or will it go quietly?
Interesting. October should have put us another 176B in the hole. On 9-30, the total US Debt was 11,909B, on 10/30 it was 11,893B. http://www.treasurydirect.gov/NP/BPDLogin?application=np
Now it did jump to 11,974B on 11-2, but as of 11-9 it was only 11,990B. Neither reflects a deficit of 176B in October.
One arm of the Government apparently can't agree with another (Oh wait, they are both Treasury?!?) Something is rotten in DC and we can smell it here in the midwest
If it stinks that bad in the Midwest, can you imagine how bad it must be in the heart of the beast and the center of the corruption? Then again, the brain tones down (and even turns off) the scent receptors after a few hours exposure to the putrid stench of gangrene and unburied corpses.
This is why everyone in DC can continue to walk around as if nothing is wrong when in fact the decomposition is so advanced pieces of rotting flesh are falling off as people rush to catch cabs and elevators.
The only thing that recently alerted DC residents to the problem was a recent Washington Post article discussing an increase in sales of fly traps and strips. As clueless as ever, the Post attributed the phenomenon to economically stressed residents failing to clean up after their dogs. Those damn dogs are leaving large stinking piles of fly and maggot breeding centers all over the nations capital. Watch where you step Congress men and women.
Of course, considering the sewer Congress lives in, this is nothing. They don't need no stinkin' nose plugs.
The nightmare continues...
This is good news for all that like smaller governments. There's so much fat to trim, it's hard to figure out where to start first. Too many bureaucrats sucking the teet whilest "creating" too much red tape and regulations, restrictions and other obstacles JUST SO THEY HAVE A JOB.
Let them bleed dry. Once Congress is reduced by 50% of staffing levels, we might have a chance to rebound. Every enterprise is reducing staff with new technology, just government keeps growing leaps and bounds. There's too much of it and too many of them and we just don't need them.
GOVERNMENT IS NOT TOO BIG TO FAIL.
Thank you for this report and breakdown ZH.
This should be published in every newspaper in the USA
You would think wouldn't you.
Everyone should do their part and send a check in today to help reduce the federal deficit... According to the treasurydirect website faq section, Concerned Americans are more than welcome to mail in their contribution...
How do you make a contribution to reduce the debt?Make your check payable to the Bureau of the Public Debt, and in the memo section, notate that it is a Gift to reduce the Debt Held by the Public. Mail your check to:
Attn Dept G
Bureau of the Public Debt
P. O. Box 2188
Parkersburg, WV 26106-2188
Note: The Bureau of the Public Debt's Office of Public Debt Accounting maintains this FAQ. Keep in mind that these questions may not fit all situations and are only intended as a guideline.
http://www.treasurydirect.gov/govt/resources/faq/faq_publicdebt.htm
Humm...wonder if your gift will be tax deductable?
I'll be happy to help...How many zeros in "Go f*** yourself!"
I'd be happy to help the gubment...How many zeros in "Go f*** yourself!"?
Great plan you idiots - you outsourced the taxpayers too!!
+1
I just don't see why they don't reach into that huge Social Security Trust Fund. It's what it's for, it's why we've been overpaying FICA since 1983 - to have this cushion. That would take a lot of the pressure off the monthly outlay. Sure, maybe we'll need it more later, but cash those Special Issue Treasury Bonds NOW. We've got a couple of trillion just lying there in that file cabinet in West Virginia, and we're worrying about cash flow?! Did someone forget about all that money, or did they buy into that alarmist, conspiracy-based nonsense David Walker was talking about the "nonreality" of that Trust Fund? I sure hope not. It can save the day! And to think if we hadn't listened to Al Gore and his silly "lock box" thinking! Where would we be right now? It was fun to make fun of the way he said "lock box," but at least we adopted his principle. Whew! So close. We might have had a disaster on our hands.
WASHINGTON (Reuters) - The U.S. government's $700 billion bailout program will ultimately produce an overall loss for taxpayers, a key auditor for the program said on Thursday.
The U.S. Treasury's Troubled Asset Relief Program will produce a "negative return" because some programs, such as $50 billion in housing subsidies, were not designed with any reasonable opportunity for a return to taxpayers, said Neil Barofsky, TARP's special inspector general.
Barofsky also told a forum sponsored by Bloomberg that he would audit the government's role and influence as a major shareholder in a number of private companies that received aid, including the role it played in General Motors Co.'s GM.UL decision to scuttle an earlier deal to sell its Opel division in Europe.
Hope Barofsky has a really trustworthy personal security detail...
We should throw a party when the debt clock hits $12 (trillion)!
Should be sometime this weekend, right?
We can serve GDPina-coladas!
Hell, nothing a few extra shifts at the Treasury printing press won't cure. Or the modern day equivalent of the printing press, the desk top PC wired into the Federal Reserve network.
Now, how many zeros did you want on that whopper Mr Bernanke?
Assuming a US population of 300M, that's an October deficit of $588 per person? Somebody check my math, unfrickinbelievable...
Yes but my wife and the 3 Children are not working so I'm up for $2300. I got news for you - I don't have it and the bank won't lend against my home which is falling in value by about the same amount each month. this leads me to the inescapable conclusion that my Taxes will rise by this amount.
Your calculations look correct. Of course, a normal calculator isn't up to the task, since it can only display 9 or 10 numbers. In anticipation of this crisis, I decided to purchase a super duper "Big Red" calculator last year (The Official Calculator Of The National Debt) to handle just this type of humongous mathematical problem.
So far, Big Red hasn't let me down with its 16 digit display and big keys designed for Congressional fat fingers. But at the rate this country is spiraling down the sewer hole, I suspect the makers of Big Red will need to come up with a new and improved model in a few short years.
http://www.bigredcalculator.com/
At that rate the deficit will double every 5 mths....better be prepared when the congress forces the Fed to cough up the 800B to cover the mess...then what (dollar up, SPX down, bonds?)
We all need to do a John Galt.
Spend nothing and defer every cent of income you can into whatever legal tax deferral program is out there.
Starve the morons in DC from the sweat of our work--that they steal and waste every day.
Collectively, such action is the only way to break the backs of the bureaucracies that run this country.
Folks you gotta read this, the treasury is asking for money donations to reign in the National Debt, as a Christmas present to the Gov't....LOL!!!!! Yeah it's in the mail...
http://news.yahoo.com/s/nm/20091112/us_nm/us_usa_economy_budget_gifts
I'll forward my notice to Uncle Warren, Ole George Soros, Alan Grayson and other assorted shills.
Given this, why the dollar rally today? Better than expected?
I love lurking on this site, but the traipsing about of the ol' conservative saws, that Medicare and Social Security are "sinkholes", really does a disservice to the honest conversation around ZH.
The GREAT SINKHOLE that is the PENTAGON is the reason this country shall dissolve into some intercinine slaughter (that will make the Yugoslavian dissolution look like a pikers ball), It is in part because we still actually believe that we are paying for "defense". With the collapse of the tax receipts, the Federal Government is barely even paying for the Pentagon, let alone anything else.
All of our cheap energy that made us the envy of the world was wasted on Vietnam - (that great defensive war against communism) Their use of fossil fuels by the Pentagon has been nothing short of profligate - it is the greatest use of fossil fuels by any single institution, IN THE HISTORY OF MANKIND.
There is a chart that is stunning in its geometric form, showing the use of gallons of gas / per soldier / per day - if I remember correctly, in WWI, it took only one gallon. By Vietnam it was over one hundred gallons per day per soldier - It now is over 1000 gallons per day per soldier. That's why by recent estimates an American soldier costs, in country, Iraq or Afghanistan, more than ONE MILLION dollars a year to fuel, feed and maintain.
And are we winning in either one of these "defensive" wars, if you call defending our resource-profligate American way of life, something that needs it? Has our never-ending set of wars become ends to themselves?
So in this looming financial crisis, as the babies and the bath water fight for the little room left, if Social Security and Medicare get launched, for the sake of our sinkhole that is "defense", what will remain of us as a society?
For the definition, go look in the dictionary under the Fascism...... In the old dictionaries, the definition was a verbatim citation from Goebbels, but I don't know if Americans can handle the truth, so they took his quote out.
Might make us too defensive about what we have become.
Social Security has certainly paid for itself. FICA receipts since 1983 have consistently exceeded the outgoes, building up a $2.5 trillion "cushion." As you say, this cushion was dumped into the general fund and spent on, let's see, Grenada, Panama,Nicaragua, Iraq I, Iraq II, Afghanistan, Somalia, the F-22, on an on, yet we're never safe, never safe enough anyway, so we pound another $1 trillion a year into our defense and security year after year, robbing the "Intra-governmental" trust funds to keep us safe, or safer, until we've arrived at this point where we need that money we squandered and it's all gone, and all we've got left when we look in the first-aid kit in the back of the B-25 over Italy, to help Snowden, is not a morphine syrette but just a note saying we're shareholders in Milo Minderbinder's enterprise, where everyone gets a share.
Social Security is an intergenerational Ponzi scheme which will eventually bust, like all Ponzis, and those at the bottom of the pyramid will lose everything ( a lifetime's worth of contributions, plus their employer's match). How can you defend it? Take off the liberal blinders and look around.
"I love lurking on this site, but the traipsing about of the ol' conservative saws, that Medicare and Social Security are "sinkholes", really does a disservice to the honest conversation around ZH.
The GREAT SINKHOLE that is the PENTAGON is the reason this country shall dissolve into some intercinine slaughter"
There's no question that prolifigate military spending is a huge burden on the budget, but the difference is that the military does not have roughly $120 trillion in unfunded obligations to cover right now--see this fair web site's recent post on the economic analysis from Sprott for the numbers.
Congress can theoretically cut off the MI complex simply by not authorizing spending, even though it might not be politically expedient to do so because of the jobs that currently depend on that spigot to keep flowing. Try doing that with Medicare or Social Security and you'll have a shit storm on your hands because these programs are looked on as entitlements, something we should recieve no matter what--many the town hall protests last summer were conducted by older people worried about the transfer of Medicare funds, not always by those concerned about the creation of even more government debt.
Even with all the money we spend on national defense, and the fact that it's stated in the Constitution that the government needs to provide for it (the question over appropriate levels is a debate for another time), how many people really view defense spending in the same manner as SS and Medicare, outside of those whose paychecks depend on it?
And yes, a government that has as much debt and unfunded obligations as we do cannot afford to ramp up military spending even further into the rafters, but neither can it afford health care for an additional tens to hundreds of millions of people in perpetuity. At some point all this spending and debt is going to make the system buckle under, and then it won't make a damn bit of difference what people think they are entitled to or how fancy the military's toys are.
Medicare and Social Security ARE sinkholes, and so is Defense in its current incarnation. It's all bathwater, no baby.
End the Fed, and government profligacy will go way down, in all departments.
Re the Social Security Trust Fund question. Maybe others can elaborate, but I don't think the "fund" can be viewed as a normal trust fund because the bonds it holds are simply government debts. If they are cashed in the governnmet has to come up with real money. The fund itself can get money but the government as a whole still is out the cash required. What this means is that for taxpayers there is no cushion to fall back on.
I think I was being overly ironic and arch. Exactly right. The Trust Fund is simply another phantom in the Haunted House known as the U.S. budget. The fund is now, and always has been, a shell game so that the FDIC "overages" could be poured into the general budget and spent on wars and the F-22, as God intended. The real money you paid in was replaced with the left pocket owing the right pocket. Which brings up a question: we call the "public debt" about $7 trillion to separate it from these trust fund liabilities (which are about $5 trillion more), with the idea that the "break-even" on Social Security was way, way out there in 2017. But the Depression has advanced that date to just about now. So is it realistic anymore to pretend that these debts can be deferred?Aren't the Social Security bonds also now part of the "public debt" and not just an intra-governmental liability? Unless we intend to repudiate, of course, just a SLIGHT possibility.
it just seems mind-boggling that this can keep going on without ramifications. Seems like interest rates have been frozen forever.This just cant go on...somethings gotta pop...
And this is the real story folks, in the end it's all about cash flow - Cash is King.
All Ponzi schemes crash when new money coming in is not sufficient to support ongoing operations. Entities that can only support their interest payments without a hope of paying back prinipal are essentially Ponzi schemes, but entities that have negative cash flow with an even more dire future forecast fail.
This can only be solved with jobs, and the policies to support them. We need a new deal for entrepreneurs and we need to close international tax loopholes - inspire us Mr. Hope.
Deficits significantly higher than receipts. Welcome to the new normal.
Yes, the continuing erosion of the revenue base of the US. So what does full faith and credit really mean?
So to fix the imbalance, what does the administration do? Address Medicare fraud or the drug benefit? Reduce military spending?
No my fellow Americans, the President pushes for another entitlement program called the health care bill. Could you be more fiscally irresponsible, it is just incredible.
and in closing;
Mal-investment has gutted the nation, unless you are doing "gods work" at Goldman.