US Budget Deficit Doubles As November Spending Hits All Time Monthly High

Tyler Durden's picture

While it is unclear if the recent increase in government spending and the resulting increase in the budget deficit, has been a factor in the recent string of better than expected US economic data, at 2pm on Monday the US Treasury announced that in November, the government's budget deficit rose to $136.7 billion, nearly double the $64.5 bilion deficit reported in the same month of 2015, which however was largely a function of a calendar quirk.

Not only was November total more than double the amount reported a year ago, but the $136.7 billion deficit, was also the highest going back all the way to February of 2016, when it jumped by $192.6 billion. February is traditionally the most spending-intensive month for the US government.

Why the spike? Two reasons: in November, total receipts were down about 2% from the same month a year earlier. Meanwhile, total federal outlays rose roughly 25% compared with November 2015, when some scheduled benefit payments had been recorded instead in October 2015 because Nov. 1 fell on a Sunday. However, even when adjusting for the "quirk", the trend was concerning: the Treasury said that adjusting for that timing shift, spending rose about 6% last month from a year earlier and the monthly deficit widened by roughly 21% on the year.

This was the highest monthly outlay reported for the month of November in US Treasury history.

The calendar quirks continued: for the first two months of the 2017 fiscal year, the budget deficit totaled $180.84 billion, down about 10% from the $201.11 billion deficit in the same period a year earlier. However, because Oct. 1 fell on a Saturday this year, some federal payments for October were instead recorded in September, substantially reducing outlays in the current fiscal year; normalizing for the data would have shown a substantial increase in the US deficit in Fiscal 2017 compared to last year.

As noted one month ago, the federal budget deficit has once again started to rise after years of marked decline. The deficit totaled $587.33 billion in the 2016 fiscal year that ended Sept. 30, or roughly 3.2% of gross domestic product. That was up from 2.5% of GDP in the prior year.

The Congressional Budget Office in August estimated that the deficit would be 3.1% of GDP in the 2017 fiscal year and rise over the next decade as spending growth outpaces revenues, reaching 4.6% of GDP in 2026. Alas, that number will be woefully low: the CBO’s baseline projection assumes no major changes to current law and continued modest economic growth. President-elect Donald Trump and congressional Republicans have signaled that overhauling the tax system will be a priority in the coming year, though the details and potential effects on the deficit and economic growth remain uncertain.

Ironically, the budget is blowing out before Trump even is inaugurated. Should the increase in deficits persist, Trump may not even have to unleash a major spending program, as Obama may have quietly done it for him.

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29.5 hours's picture

,

,

I'm so old, I can remember when the budget deficit was considered a problem. Ahh, those were the days.

 

Hammer823's picture

Just a way of life now.  

Silver Swan's picture

Ahem, excuse me, budgets are reserved for countries that DON'T print the world reserve currency, thank you very much.  :)

 

SpanishGoop's picture

Shut up, you only have a reserve currency.

Reserve as in second, backup.

Let's go back to the first....remind me, that stable one ?

 

 

Ghost of Porky's picture

Barry doing some last minute Christmas shopping at Uncle Sam's Club.

SpanishGoop's picture

Metushelah is that you ?

 

buzzsaw99's picture

yeah but now we have transgender bathrooms and a two trillion dollar fighter jet that runs on windows 10 (sometimes)

PirateOfBaltimore's picture

CIA plotting this soft coup must've been pricey.

cherry picker's picture

I've been trying to run a deficit budget like .gov for 45 years, and after six months or so they shut down my bank account and creditors keep harassing me, every time I tried it.

How the hell can people hired to look after our affairs manage to do it for so long is behind me.  If I were a company I would cut off credit to .gov.

boattrash's picture

...do we all feel like we're getting our money's worth for our hard-earned tax $$? FFS

One-Eyed-Thong's picture

PRINT BABY, PRINT !!

Rainman's picture

So Soertero maxed out the credit card, ate the seed corn and burned down the barn ... just awesome !

Bostonian's picture

Sounds like we are already running massive fiscal stimulus at a rate of > $1 trillion a year. Yet, the market appears to be treating Trump's "fiscal stimulus plan" as a new, exciting and untried idea.

nakki's picture

I'm thinking 25 trillion plus by 2020 and it still won't matter Krugman and Cheney told me so. Donald Trump thinks the government can just print money. Guess he thinks the FED is a government agency

SpanishGoop's picture

"ran a $136.7 billion deficit in November,"

Sounds like a good businessplan to me.



2ndamendment's picture

The crash from all this debt and spending is going to be spectacular (I don't mean in a good way)! It really doesn't matter who the president is, one of these years in the not too distant future this whole thing is going to come crumbling down in a completely violent fashion. 

hooligan2009's picture

the FSA got their year end bonus, plus all that spending on demonrat causes and sponsoring MSM, MIC and CIA activities - check the fine print!

101 years and counting's picture

how many es contracts do the proud taxpayers of the US now own with that $136.7B in new debt?

hooligan2009's picture

at one million a piece for the ED depo, thats only 1,367

at 100,000 a piece for the bond futs, thats still only 13,670

- futures, the first fiat currency, trouble is, the government borrows real money from the future

Thebighouse's picture

obama has a fiduciary responsibility to run our government in a fiscally responsible manner. 

he has not.   he should be punished.  How can you waste that much money in 8 years. 

That goes for ALL who have signed on to any of that spending.

They should all be tried for treason.

Drain the Swamp.

itstippy's picture

The legislative branch (Congress) controls spending and taxes, not the executive branch (President).  

johnnycanuck's picture

Yeah, like Greenspan, Paulson,  Bill the deregulation puppet and the Chimpendefuehrer who invaded Afghanistan and Iraq.  Very fiscally responsible lot indeed.

Long on swagger, short on responsible behaviour.

LyLo's picture

Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort.

Sorry, but it isn't really treason. 

HOWEVER, everyone who signed any money or arms to Al Nusra, who is an Al Qaeda branch, should definitely be tried for treason.  Up to and including the president.

Dave5150's picture

Obama must have taken another vacation with Moochelle.

AlphaSeraph's picture

Has State funding of Fake News gone into overdrive?

GreatUncle's picture

Got to flush all those economic manipulations because Trump will find them when in office.

How many unemployed?

Gophamet's picture

The final grab by the barium enema legacy prior to the January evac!

truthseeker47's picture

No doubt Obummer will be very proud to have reached his goal of a $20 trillion debt by the time he leaves:

http://www.usdebtclock.org/

How ya like that "change"?  Quite a legacy indeed.

darteaus's picture

Got to dress up the economy with deficit spending before the election!

johnnycanuck's picture

I heard Americans are preoccupied with things like fighting over a furry robot toy that pops out of a shell or something.

Reminds me of how the Europeans got the best of our indigenous people. Lot's of trinkets and rot gut booze. Then they deployed the lawyers.

hooligan2009's picture

http://www.usdebtclock.org/

just 62 billion to go to get to 20 trillion in government debt (excluding all those 25 trillion of unfunded liabilties)

19,932 billion right now - going up at 100,000 a minute, so feb 27, 2017 is the glorious day for 20 trillion (and dow at 20,000, ten year bonds at 3%?)

Phillyguy's picture

Deficits are climbing because spending is out pacing tax receipts. What created this situation?

1. Declining tax receipts, a consequence of increasing unemployment and an economy in decline.

2. Multiple tax cuts, primarily benefiting the wealthy (Reagan, Bush II and soon Trump) which has resulted in declining tax revenue from large corporations. 

3. Financial deregulation (repeal of Glass Steagall Act and Passage of Commodity Futures Modernization act of 2000; Clinton) which helped set up conditions for 2008 financial crash. 

4. Increasing tax subsidies for agriculture, energy, etc.

5. Out of control Pentagon budget and $ multi trillion wars- now stretching from the Levant, to Caspian Basin, Persian Gulf, China Sea, Indian Ocean, Horn of Africa, the Maghreb, to Eastern Europe and Russian border. To put this in perspective- since 2000, the Pentagon has spent around $1 trillion in Afghanistan (now the world’s largest heroin producer), $5 trillion in Iraq and billions more on wars in Libya, Yemen, Syria and Ukraine.

6. Increased spending for social programs- SS and Medicare (these really should not be included as they are funded by separate income taxes).

Indicative of just how completely dysfunctional the US economy has become, look no farther than Caterpillar. Retail Sales have declined for 46 consecutive months (Link: www.zerohedge.com/news/2016-10-24/caterpillar-retail-sales-decline-46-co...) while CAT stock is a lofty $95/share, juiced even higher during the Trump stock “rally”. Bottom line- it is only a question of time before the next financial crash happens- expect things to get very ugly.

YHC-FTSE's picture

The economic health of a nation or credit worthiness, is often expressed in terms of GDP -v- National debt ratio. It's a complete fallacy since GDP is not an expression of income but of economic activity.

To understand the fiscal policies of a nation heavily in debt, all you have to do is remember that one of the components of GDP is Government Spending+Government Investment. The more heavily indebted a nation becomes, the more that nation needs to spend in order to look good on the GDP.

All the tricks to make the GDP/Debt ratio better can be found in: GDP= (C+I+G+(X-I))  (Private Consumption+Govt Investment+Government Spending+(Exports-Imports))  In some nations for instance, Private consumption have been fudged to include illegal acts such as drugs & prostitution as an economic activity. I dare say in the near future as debts start to run away, dog walking and uploading cat videos onto youtube will be included too. Perhaps they will monetize breathing and include every breather as a domestic product. 

The thing is, as private consumption & exports decrease, debtor nations have no choice but to minimize the GDP/Debt ratio by government spending. In other words, it is a systemic arithmetic insanity that economists must balance to look good on paper. Expect more spending. Much more, whoever enters the corridors of power.

orangegeek's picture

Obama's LEGACY OF FAIL.

 

GET THE FUCK OUT OF THE WHITE HOUSE NOW BARRY!!!

 

jpmrwb's picture

It's good to talk about the deficit but that is only half of the story. They always just talk about the deficit but not the total debt was added each year. For instance, last year the Total Debt added to the National Debt was over 1.3 trillion dollars. This fiscal year will be higher. The Fiscal Year ends on 9/30/17.

eeaton's picture

Nothing a Fed rate hike on Wed won't fix!

koda's picture

What is the end game for the global economy?

https://www.youtube.com/watch?v=lJNW2IwBJg8

Skiprrrdog's picture
US Budget Deficit Doubles As November Spending Hits All Time Monthly High

That is because it is the holiday season, and no reason not to believe that the Kenyan and his husband Michael will burn through as many taxpayer dollars as they can...

pparalegal's picture

I was worried until I realized the world added 25% more days to the month of November. Now I feel much better.

sinbad2's picture

July got 31 days because Julius Caesar was a great leader, not to be outdone, Augustus gave his month 31 days as well. February was the loser.

I thought Killary might name a month after herself and give it 32 days, because she knows she is the best leader ever.

sinbad2's picture

The longer the US Government props up the markets the more expensive it becomes, also Obomba was trying to make the economy look good so Killary would win.

Next year they will just let it collapse, and retire to Hawaii, whilst you guys fight over the crumbs they have left you.

Ace006's picture

It's a good thing the Republicans control the House so they can put a stop to any excessive spending!

truthseeker47's picture

You forgot the sarc tag, Ace.  Some people might think you are serious!

nanos's picture

WOW,

time for new highs in stock market!