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Treasury Announces $49.8 Billion January Deficit, $7.2 Billion Greater Than Year Prior, $21.1 Billion In Interest Payments

Tyler Durden's picture




 

The Treasury has released its monthly deficit numbers, and while revenues this January came at a robust $226.6 billion (compared to $205.2 billion a year earlier), the outlays exploded to $276.3 billion compared to just $247.9 billion a year ago. The net result was a deficit of $49.8 billion in January, $7.2 billion more than a year earlier. And the number that all are watching (increasingly more irrelevantly by the way, as the Fed now owns almost 15% of marketable debt) - interest on debt securities, was $21.1 billion, or 7.6% of all outlays. Since the Fed's holdings will never be reduced, and in fact will continue growing with QE3, 4, and so forth, soon all the interest on marketable debt will be paid to Ben Bernanke, who will promptly remit it back to the Treasury in the epitome of the biggest ponzi scheme ever conceived by man.

On the revenue side, not surprisingly the biggest contributor was individual income taxes, amounting to $129 billion.

On the outlays side, the biggest payment was for Health and Human Services, which was $63.8 billion, followed by Social Security at $60 billion, and Defense-Military of $46.4 billion.

Full report for those who care about America's insolvency.

 

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Thu, 02/10/2011 - 15:37 | 950397 happybob007
happybob007's picture

How does this square with the ~ $133 billion in increased debt from the US Treasury debt to the penny page?

I must be missing something.

Thu, 02/10/2011 - 15:46 | 950431 papaswamp
papaswamp's picture

Debt issued by Treasury (UST) isn't counted. This report is just income versus outlays (deficit)....not total debt.

Thu, 02/10/2011 - 15:47 | 950441 Pladizow
Pladizow's picture

Can you say.......CIRCLE JERK?!?!

Thu, 02/10/2011 - 15:49 | 950450 topcallingtroll
topcallingtroll's picture

So the treasury number is the total debt increase for the month?

Thu, 02/10/2011 - 16:01 | 950491 papaswamp
papaswamp's picture

Correct. You can find the total debt for the month by putting in the dates:

http://www.treasurydirect.gov/NP/BPDLogin?application=np

Thus as TD has mentioned numerous times...Treasury auctions off more debt than deficit created. I don't know why they do this...but it is the game.

Thu, 02/10/2011 - 16:22 | 950597 Sudden Debt
Sudden Debt's picture

YOU WON'T SEE THAT ON A COVER PAGE OF A NEWSPAPER!!

 

only in the history books...

Thu, 02/10/2011 - 15:46 | 950433 topcallingtroll
topcallingtroll's picture

These numbers rarely seem to match. Maybe someone knows why?

Thu, 02/10/2011 - 23:27 | 951991 mark mchugh
mark mchugh's picture

I believe it is because maturing debt needs to get rolled.  If there is a place to find out how much debt is maturing when, I don't know about.

There are other people who say treasury issues even more debt than can be accounted for by deficit and rollover, but I don't know what they're basing that statement on.

Thu, 02/10/2011 - 15:37 | 950398 jus_lite_reading
jus_lite_reading's picture

Damn, I don't even have time to order my copy of the book, "The Coming Apocaplyse and How to Prepare."

 

Thu, 02/10/2011 - 15:44 | 950404 Cognitive Dissonance
Cognitive Dissonance's picture

"...soon all the interest on marketable debt will be paid to Ben Bernanke, who will promptly remit it back to the Treasury in the epitome of the biggest ponzi scheme ever conceived by man."

It's nice to know they have things under control and that they know what they're doing.

Um mm, they do know what they're doing......right?

Hello? Is this microphone on?

Thu, 02/10/2011 - 15:51 | 950452 jus_lite_reading
jus_lite_reading's picture

You can't make this $%^&* up!

 

http://finance.yahoo.com/banking-budgeting/article/112092/the-bull-marke...

 

They must pay them good to lie! $%^&*!

Thu, 02/10/2011 - 16:39 | 950667 gravitas
gravitas's picture

From the link: "Yes, too much debt got us into this mess. But the fact that U.S. consumer borrowing rose in December for a third consecutive month may be a good thing. Why? Because it marked the first increase in credit-card charges in more than two years — and is probably the driving force behind improving holiday sales. What's more, psychologically consumers are in a better place if they are swiping plastic. That implies they believe they'll have the cash in a few months to pay off debts. Though whether or not those bills actually get paid is debatable, the change is sentiment is certainly a good sign."

 

$%^&* indeed. One of the more distasteful things I've read all week. Congrats to the author for taking old-hat sentiment to abysmal new lows.

Thu, 02/10/2011 - 15:58 | 950492 Duuude
Duuude's picture

The shareholders of the Fed get a cut.

Thu, 02/10/2011 - 15:39 | 950406 cougar_w
cougar_w's picture

If you live by the debt roll, you die by it.

Thu, 02/10/2011 - 16:33 | 950477 Cognitive Dissonance
Cognitive Dissonance's picture

I wouldn't go so far as to say the man has a debt roll. I mean he's got a weight problem. What's the central banker gonna do, he's Samoan?

http://www.youtube.com/watch?v=uWAPzkm3W10&playnext=1&list=PLBE500A0518A71773

http://www.imdb.com/title/tt0110912/

Thu, 02/10/2011 - 15:40 | 950415 Quinvarius
Quinvarius's picture

Any debt the Fed owns is no debt at all.  Any money based on debt the Fed owns is no money at all.

Thu, 02/10/2011 - 16:05 | 950519 Azannoth
Azannoth's picture

What if they made the FED buy 50% or more of all debt and than nationalize the FED would that not effectively cancel the debt the FED holds  ?

Thu, 02/10/2011 - 16:36 | 950662 goodrich4bk
goodrich4bk's picture

But then that would be printing money.  And Ben has told us that he is not printing money.

 

In Ben's world, he is correct.  For every Treasury he buys with his printed money, the Treasury has an exact corresponding obligation to pay the printed money back.  That is how central bankers distinguish QE from money printing.  If they were printing money, the money would immediately escape into the economy with no strings attached to pull it back.  The Treasuries in Ben's safe are the strings that he claims --- with 100% certainty --- that he can pull if the money he has "printed" starts circulating with too much velocity and causes a nasty amount of inflation.

His problem --- and ours --- is that pulling on the strings, i.e., selling Treasuries or letting them mature without replacement, will cause rates to rise.  And that would make his banks insolvent.  So there will be no end to quantitative easing so long as banks need artificially low rates to remain solvent.

So Ben continues to claim that his strings will prevent inflation even though we know he'll never be able to use the strings.  The strings are just a convenient fiction to let us think we are different than Weimar, Zimbabwe and Argentine.  This game will continue until it can't continue.  And then they'll just change the rules again.

Thu, 02/10/2011 - 19:55 | 951393 cranky-old-geezer
cranky-old-geezer's picture

"This game will continue until it can't continue.  And then they'll just change the rules again."

Nope.

The game will continue until other nations decide to end it.

 

Thu, 02/10/2011 - 16:36 | 950664 goodrich4bk
goodrich4bk's picture

But then that would be printing money.  And Ben has told us that he is not printing money.

 

In Ben's world, he is correct.  For every Treasury he buys with his printed money, the Treasury has an exact corresponding obligation to pay the printed money back.  That is how central bankers distinguish QE from money printing.  If they were printing money, the money would immediately escape into the economy with no strings attached to pull it back.  The Treasuries in Ben's safe are the strings that he claims --- with 100% certainty --- that he can pull if the money he has "printed" starts circulating with too much velocity and causes a nasty amount of inflation.

His problem --- and ours --- is that pulling on the strings, i.e., selling Treasuries or letting them mature without replacement, will cause rates to rise.  And that would make his banks insolvent.  So there will be no end to quantitative easing so long as banks need artificially low rates to remain solvent.

So Ben continues to claim that his strings will prevent inflation even though we know he'll never be able to use the strings.  The strings are just a convenient fiction to let us think we are different than Weimar, Zimbabwe and Argentine.  This game will continue until it can't continue.  And then they'll just change the rules again.

Thu, 02/10/2011 - 15:43 | 950419 reTARD
reTARD's picture

The Bernank is working hard. More productive than last year!

Thu, 02/10/2011 - 15:42 | 950420 101 years and c...
101 years and counting's picture

Serious question here...didn't the Fed transfer ~$75 Billion to the Treasury in January?  That was the amount of interest the Treasury paid to the Fed in 2010, which the Fed then gave back to the Treasury......

Thu, 02/10/2011 - 16:31 | 950640 ghostfaceinvestah
ghostfaceinvestah's picture

Yes, that is why the interest rate on our debt will soon effectively be zero - Benocide will own it all, so Timmay will pay Benocide, who will pay it back to Timmay.

Why other nations still accept USD is beyond me...

Thu, 02/10/2011 - 15:43 | 950422 Racer
Racer's picture

And the US taxpayers/debt slaves will be forced to bend over even more for the banksters

Thu, 02/10/2011 - 15:43 | 950423 Cursive
Cursive's picture

Receipts up y/o/y, but spending up more. More proof that the debt spirals out of control. There is no stopping the approaching freight train.

Thu, 02/10/2011 - 16:34 | 950652 ghostfaceinvestah
ghostfaceinvestah's picture

More proof that the multiplier of debt is less than 1: you realize I am sure that a lot of those receipts are a result of deficit spending - transfer payments and the like.

So the FedGov creates $1 of debt and eventually gets 50cents back in taxes.

In other words, a downward spiral.

Thu, 02/10/2011 - 23:37 | 952012 Cursive
Cursive's picture

@ghostfaceinvestah

Exactly.  BTW, good to talk to a ZH oldtimer from back in the day.  :)

Thu, 02/10/2011 - 15:44 | 950428 sabra1
sabra1's picture

what! you pay income tax?

Thu, 02/10/2011 - 15:46 | 950430 SheepDog-One
SheepDog-One's picture

This is a clear call for someone to announce some further completely insane course of action.

Thu, 02/10/2011 - 15:52 | 950460 SayTabserb
SayTabserb's picture

Agreed. The clarion call to lunacy is heard o'er the land again.

Thu, 02/10/2011 - 16:16 | 950568 the rookie cynic
the rookie cynic's picture

Yeah, it's some crazy shit music coming from on high. Comrade Obama intones populist homilies as pied-piper of the hoi polloi , while the Rubin-ites pillage and plunder the same. http://therookiecynic.wordpress.com/

Thu, 02/10/2011 - 16:23 | 950602 WestVillageIdiot
WestVillageIdiot's picture

Obama is the magician's left hand.  He keeps the eyes of the sheep focused away from what is really being done by the right hand. 

Thu, 02/10/2011 - 15:49 | 950447 virgilcaine
virgilcaine's picture

TLT taking it on the Chin today.. ouch! Too many Sheets of TP are flying off the printer press.

Thu, 02/10/2011 - 15:49 | 950449 SayTabserb
SayTabserb's picture

Here's something I notice: 4 months in, the total haul is about $750 billion in receipts. Still, they're sticking to their story that total receipts for the year will be $2.4 trillion, a nice little uptick from last year. My multiplication skills are rusty, but it seems that 1/3rd of the way into the fiscal yr., multiplying $750 billion by 3 doesn't quite get there. PLUS, that $2.4 trillion est. has been there even before the Social Security FICA reduction of about 16% (2 points haved off an average 12% tax, employer/employee). Is the rainbow unicorn eating sparkly skittles again?

Thu, 02/10/2011 - 15:50 | 950454 SayTabserb
SayTabserb's picture

meant to say "shaved off" a 12% tax, re: FICA.

Thu, 02/10/2011 - 16:18 | 950573 papaswamp
papaswamp's picture

Look for an increase in intergovernmental debt to keep the increases hidden (somewhat).

Thu, 02/10/2011 - 17:00 | 950756 cxl9
cxl9's picture

FICA was not reduced on the employer side. FICA 2011 is 7.65% on the employer side and was reduced two points to 5.65% on the employee side, for a total of 13.3%.

Thu, 02/10/2011 - 15:54 | 950453 plocequ1
plocequ1's picture

Who gives a fuck? Im having bigger issues with my Verizon Iphone ( sarcasm on)

Thu, 02/10/2011 - 16:00 | 950501 Pure Evil
Pure Evil's picture

Man, you do have problems. Makes problems in the Middle East seem tiny by comparison.

I think what we have here, is a failure to communicate over the Verizon network.

Thu, 02/10/2011 - 16:34 | 950651 Cognitive Dissonance
Cognitive Dissonance's picture

Can you hear me now?

Thu, 02/10/2011 - 17:40 | 950927 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Good!

Thu, 02/10/2011 - 15:55 | 950468 docj
docj's picture

Sure, because deficits always increase y/o/y during a "recovery".  Right?

Right???

Thu, 02/10/2011 - 16:24 | 950604 Sudden Debt
Sudden Debt's picture

yes... whatever makes you happy...

Thu, 02/10/2011 - 15:57 | 950469 virgilcaine
virgilcaine's picture

The Egyptian Army is taking over.. quik print another Trillion!..Ben's pavlovian response to crisis...Print...ring crisis bell..Print.. bell ring.

Thu, 02/10/2011 - 15:56 | 950475 virgilcaine
virgilcaine's picture

double post.

Thu, 02/10/2011 - 16:03 | 950514 ThirdCoastSurfer
ThirdCoastSurfer's picture

Not long now before the interest is $100 per every man, woman, child, per month.

Maybe they can work out a way that using creative accounting we can all pay that to the Treasury on the first of the month and the Fed can send us a check back on the last. Since were already in an inextricable Ponzi scheme, why not add check kiting? 

Thu, 02/10/2011 - 16:08 | 950526 TJ is Rolling i...
TJ is Rolling in His Grave's picture

Nothing to see here, move along.

Thu, 02/10/2011 - 16:21 | 950562 hambone
hambone's picture

Tough day for BB - dollar strengthens while cost of debt rockets up...not 'zactly like they drew it up.

BB is on the precipice of losing the entire curve...and then we'd see real interest cost shock.  But that seems unlikely as BB is all in...look for TLT to prosper from here?

Thu, 02/10/2011 - 16:22 | 950582 mark mchugh
mark mchugh's picture

Tyler, you forgot to point out that a monthly deficit of 49.7B is AWESOME for us.  That's the third smallest monthly deficit of the last 16 months!!!!

That's why you'll never make it in mainstream media.  See a good MSM headline would read "US goverment reduces deficit by $100B in just Two Months!"

AP (Wahington) - In November 2010, the US government monthly deficit was a staggering $150B.  The new congress was able to trim that to less than $50B in it's very first month, thanks to the renewed bipartisan spirit sweeping through Washington.  If congress can keep up this pace, we should see a $50B surplus by the end of March 2011.  Most members of congress however did recommend raising the debt ceiling, but only as a precaution......

 

Now that's good news copy!

Thu, 02/10/2011 - 16:29 | 950632 hambone
hambone's picture

Nicely done Mark - absolute twisted logic crap! Perfect.

BTW- isn't Jan the month we get the Fed remissions as a big tailwind...something like $80B this year counted against the monthly deficit?

 

Thu, 02/10/2011 - 17:45 | 950957 mark mchugh
mark mchugh's picture

Thanks, and yes you're right about the remissions.  Apparently $81B vs. $45B in '09.

Of course when you look at it that way, the $21.4B in increased revenue vanishes, and then some.  So let's not look at it that way.

 

Thu, 02/10/2011 - 16:37 | 950666 ghostfaceinvestah
ghostfaceinvestah's picture

$50B in deficit for the month, and Benocide is buying 97B next month.

So, just like with the MBS market, he is buying more than the new creation run rate.

Pure debt monetization.

Thu, 02/10/2011 - 16:48 | 950719 gguillory75
gguillory75's picture

Don't the auctions have to cover the amount of debt matured and being refunded, in addition to the current deficit?

Thu, 02/10/2011 - 17:20 | 950829 davepowers
davepowers's picture

Since the Fed's holdings will never be reduced, and in fact will continue growing with QE3, 4, and so forth, soon all the interest on marketable debt will be paid to Ben Bernanke, who will promptly remit it back to the Treasury in the epitome of the biggest ponzi scheme ever conceived by man.

 

---

unless the FED uses the remittance to the Treasury as a cover to unload the toxic BMS/GSE paper on its balance sheet, charging the losses against the money owed the Treasury per the FED's Jan. policy announcement.


Thu, 02/10/2011 - 18:10 | 951075 gwar5
gwar5's picture

Betcha revenue falls from all the people out of work....

Thu, 02/10/2011 - 19:02 | 951256 Rainman
Rainman's picture

....or it will spike 20% on 401-k cashout taxes and 10% penalties as the sheep attempt to pay their Chevron gas bill. I LOVE AMERICA !!

Fri, 02/11/2011 - 01:24 | 952144 Yen Cross
Yen Cross's picture

Gotta love those hidden negative rates, translated into increased bond yields.

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