Budget Deficit

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As Budget Deficit Hits Record High, Interest On US Public Debt Hits Record Low





What is wrong with this picture: the MTS just announced that the February budget deficit was $220.9 billion, after receipts of just $107.5 billion with vastly surpassed by outlays of $328.4 billion. This is a record. Yet the interest on the public debt was a mere $16.9 billion (page 13 of the MTS report). The reason for this is because as TreasuryDirect points out, in February the interest on public marketable debt (actual cash outlays), which as of Monday stood at $8.061 trillion, hit an all time low of 2.548%. How is it possible that unprecedented debt accumulation can result in ever declining interest rates, and Treasury auctions, such as today's 10 Year reopening, in which the Bid To Cover hit an all time high? One answer: The Federal Reserve, which through complete domination of the entire capital market courtesy of ZIRP and QE has now turned market logic upside down by 180 degrees. In a normal world, the more money you borrow, the greater the associated risk, and the greater the interest payments on this debt. Not in America though. So can we assume that the Fed can forever keep rates on debt at record low levels? No. Which begs the question: what happens when interest rates do finally start going up?

 
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Paging Ken Rogoff: CBO Revises Budget Deficit Higher By $1.2 Trillion, Says In 2020 Debt Will Be Over $20 Trillion, Debt-To-GDP At 90%





It's Friday after the close - time for the government to sneak one past traders, who are already on their fifth moqito. And sure enough, the bomb today comes from the Congressional Budget Office: The CBO, in an annual analysis of the White House budget proposal, said today that under Obama’s plan deficits would never shrink below 4 percent of the economy between now and 2020. The cumulative deficits would total $9.76 trillion, and debt held by the public would amount to 90 percent of the nation’s gross domestic product by 2020, the CBO said. In other words, the CBO has just confirmed that America has, at best, 10 years before it is officially bankrupt. That's about 9 years of multi-trillion bonuses for Goldman Sachs. Congratulations fellas.

 
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Goldman's Greek Budget Deficit Mea Culpa. On The Dot





As expected, following earlier protestation by the Greek finance ministry, Erik Nielsen recants (but not entirely). After all, who knows what else the Greek FinMin can disclose about GS swaps and other "financial innovation" exports, should this devolve to a full blown mudslinging competition.

 
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Greece Finance Ministry Official Denies Budget Deficit Explosion, Says "Goldman Misunderstood Data"





Goldman is not making any friends today (to be expected - Greece likely does not need Goldman's creative swap accounting anymore - after all, they (Greece, not Goldman) are bankrupt right? Why else would they need a bailout). Earlier we first reported about Goldman's novel read of the "revised" Greek budget. It appears Greece is not too happy with this and is already blaming Goldman for data misinterpretation. We await Erik Nielsen's mea culpa.

 
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Greece's 2009 Budget Deficit Was Just Revised From 12.2% To 16% Of GDP





Goldman's Erik Nielsen lands the bombshell that the Greek deficit mysteriously increased from €29.4 billion to a shopping €37.9 (keep in mind, this is not Bernanke notation where only quad- prefixes impress people at this point). This increases the (running) 2009 budget deficit from 12.2% to 16%! While certainly not the last time we hear of "prior revisions", the question of just how patient Germany will be, should this number approach, oh say, 50% once the artificial support of various Goldman swaps expires (and at 50% the BSDs like Goldman will surely round up to 100%), is very much open.

 
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Visualizing The Abyss: An Itemized Representation Of The (Endless) U.S. Budget Deficit





A terrific chart out of the New York Times, demonstrating succinctly the endless abyss that the actual US budget is becoming (ignore the rosy expectations for a surplus - the likelihood that the US can claw its way back out of the hole at this point are slime to none). The attached article by David Leonhardt, America's Sea of Red Ink Was Years In The Making, is also a good read, and shows just how deep the sovereign debt rabbit hole goes.

 
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Time For Obama To Ban Budget Deficit Next: $118 Billion In Coupons On Deck, $166 Billion Including Bills





If only it were as easy to ban the budget deficit. We have $118 billion in coupons on deck to be auctioned off on February 1. Out of curiosity, does the prop trading ban also make quantitative trading, aka the Fed's prop trading operation, also illegal?

 
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December Budget Deficit Hits $91.9 Billion, $389 Billion So Far In Fiscal 2010





The December budget numbers are out and they are ugly. December was the record 15th straight budget deficit in a row with -$91.9 billion more in outflows than inflows, compared to a $51.8 billion deficit in December of 2008. Fiscal 2010 budget deficit so far is -$388.5 billion, and $1.47 trillion for the trailing twelve months.

 
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Long-Term Budget Deficit Revised, Now $2 Trillion Dollars Worse





Two days ago the market ripped a few hundred points after yapping heads couldn't shut up about how next year's budget deficit was going to be revised down by $260 billion, after a stellar financial system managed to ramp up 100% ever since State Street refused to lend any stocks for shorting... ever... and after the FDIC has somehow managed to maintain the bank failure rate at a stellar +/- 10 banks per week. Well, as is usually the case with CNBC, they jumped the shark early in keeping with the overall propaganda directive. The full report that will be released on August 25 will demonstrate that the budget deficit for the next ten years will be worse... by $2 trillion dollars.

 
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Obama To Reduce Budget Deficit By $262 On "Fewer" Than Expected Bank Failures





Archive this one for the funny pages. It has been leaked by administration officials (and sponged up by Bloomberg), that on August 25, when the CBO releases its updated budget estimate, the 2009 deficit is expected to decline from $1.825 trillion to $1.58 trillion. And, get this, one of the reasons for the reduction is the FDIC spending $78 billion less, presumably due to "fewer bank failures than the administration anticipated." Pardon us, but last time we checked, not only did the FDIC have no cash left in the FDIC, and was effectively in a debtor position vis-a-vis the administration, but of the top 4 banks pending for blow up, Colonial was under (granted with some arbitrarily optimistic loss expectations), Guaranty was about to be hawked over to a few siesta loving left midfielders, and Corus was about to... well, we are not quite sure what the hell Corus is doing these days.

 
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July Budget Deficit Grows By $181 Billion, YTD Individual And Corporate Receipts Tumble





The Congressional Budget Office released its preliminary July 2009 budget numbers - the budget deficit is now expected to be $181 billion, an 80% increase compared to the July 2008 deficit of $101 billion.

 
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First Tax-Month Budget Deficit Since 1983





The U.S. reported the first April budget deficit in over 25 years, specifically $21 billion on a significant drop in individual and corporate tax receipts. April, which is traditionally the strongest budget revenue month due to the peak in individual tax revenue collection was unable to buck the trend in second derivatives and green shoots and is likely an indication of just how much worse the economy will get with traditional Treasury revenue sources rapidly disappearing. The Congressional Budget Office, which forecasts a $1.75 trillion budget shortfall for the Sept.

 
Tyler Durden's picture

First Tax-Month Budget Deficit Since 1983





The U.S. reported the first April budget deficit in over 25 years, specifically $21 billion on a significant drop in individual and corporate tax receipts. April, which is traditionally the strongest budget revenue month due to the peak in individual tax revenue collection was unable to buck the trend in second derivatives and green shoots and is likely an indication of just how much worse the economy will get with traditional Treasury revenue sources rapidly disappearing. The Congressional Budget Office, which forecasts a $1.75 trillion budget shortfall for the Sept.

 
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Step-By-Step Guide to Near-Term Budget Deficit Funding





With the U.S. government unable to print money fast enough, and "sophisticated" investors rushing to buy every bond Washington will peddle to fund the upcoming multi-trillion budget deficit, Zero Hedge has decided to make life easier for everyone and provide a cribsheet for all upcoming Bill, Note, Bond and TIPS auctions. We wish everyone the best as they earn negative 2-100% real interest rates on their investments.
 
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