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: