It’s the Spending, Stupid
Posted by Dan Draney on March 12, 2010
WASHINGTON—Even as government receipts posted a rare increase in February, soaring outlays pushed the country’s year-to-date deficit up to a record $651.60 billion.
The government’s fiscal 2010 year-to-date deficit is up 10.5% from fiscal year 2009.
The government in February alone ran its largest ever monthly deficit—$221 billion, the U.S. Treasury said in releasing its monthly budget statement Wednesday. The government in February 2009 ran a budget deficit of nearly $194 billion.
“The budget balance has deteriorated sharply over the past 2 years with outlays rising rapidly—mainly due to the government’s various stimulus programs–and revenues shrinking—both because of the weak economy and the various tax cuts meant to stimulate the economy,” Steven A. Wood, an economist with Insight Economics, wrote in a client note.
There are relatively few years prior to Obama when the feds borrowed that many dollars. Dividing by the US populations to put the numbers in perspective we see that in one 28-day month, the feds borrowed another $715 per person or $2861 per family of four. It’s even worse, because although receipts were up, spending was up even more:
|Total||Per Person||Family of 4|
|Deficit Feb 2010 alone||$220,910,000,000||$715||$2,861|
|Outlays Feb 2010 alone||$328,430,000,000||$1,063||$4,252|
|Receipts Feb 2010 alone||$107,520,000,000||$348||$1,392|
Note that borrowing was more than twice the receipts. How long could your family keep spending three times your income and borrowing the rest? Even the feds can’t keep it up, although they are determined to try. The interest costs alone were $52 per person for February, despite the easy money, pro-inflation policy of the Federal Reserve which is (so far) keeping interest rates artificially low. Look for interest costs to go up sharply in the not too distant future.