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Treasury Realizes First Surplus in Nearly 2.5 Years

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The US Treasury realized a monthly surplus of $118.7 billion in January. It was the first budget surplus since September 2019 and the largest since it realized a $160 billion surplus in April of 2019.

The surplus was driven by high revenue from a continued surge in Individual Taxes. This was combined with shrinking expenditures due to the expiration of the child tax credits that ended on December 31. The surplus for the month also was helped by $70 billion in proceeds from a wireless spectrum auction.

Figure: 1 Monthly Federal Budget

The Sankey diagram below provides a look at spending and revenue. Individual Taxes covered 83% of total spending in January! This compares with only covering 34.3% for the TTM. Health and Human Services (HHS) continue to be the biggest line item in the budget, representing 39.65% of total spending with Social Security accounting for 29.2%. For the year, these items represented 22.75% and 18.14% respectively.

Figure: 2 Monthly Federal Budget Sankey

Comparing the monthly (above) to the yearly (below) shows how dramatically the Individual Taxes have swelled to represent the most recent deficit.

Figure: 3 TTM Federal Budget Sankey

Figure 4 below, expands on the revenue side of Figure 1 above. The fourth bar from the left is April 2019 when the budget surplus was last higher than the most recent month. Individual Tax Revenues were higher than compared to now by $43B.

The biggest difference was that in 2019, this was an outlier month whereas now it appears most months have high revenues. April 2019 saw a surge in tax revenues, presumably as the tax season completed.

It’s possible that instead of getting higher tax receipts this April, the government will be sending out a lot of refund checks. The data will have to be watched over the next couple of months to see if the Treasury can maintain high revenues.

Another possible explanation is that surging inflation has led to overall higher incomes and a higher stock market. Unfortunately, this “windfall” will prove more hurtful in the long run as government spending increases due to higher costs, higher interest rates, and very likely a recession.

Figure: 4 Monthly Receipts

The other side of the equation also shows an improving picture. The biggest change is the reduction in “Other Outlay” which has turned positive for the month of January by $8B compared to averaging a monthly expenditure of -$85B. “Other Outlay” generally represents stimulus payments.

Figure: 5 Monthly Outlays

The table below goes deeper into the numbers of each category. The key takeaways from the charts and table:


  • Debt Interest is up 19% year over year even though interest rates are unchanged
    • Debt Interest is even higher than 2019 when interest rates were between 1-2%
  • MoM all categories have decreased except for HHS and Education
    • Education is actually up 38% YoY
  • TTM spending on Health and Human Services (HHS) is up $245B or 20% compared to pre-pandemic levels


  • TTM Individual Taxes ($2.3T) are up 44% YoY ($1.57T) and up 31% from the TTM ending 2019 ($1.75T)
    • MoM Individual Taxes have climbed 14.2%
  • TTM Corporate Taxes ($399B) are up an incredible 80% YoY ($221B) and up 62% from the TTM ending 2019 ($246B)
    • MoM saw a decline, but Corporate Taxes are generally more choppy


  • Total Receipts are up more than $900B (27.6%) in a single year!
  • Outlays are down 3.4% YoY

Figure: 6 US Budget Detail

Historical Perspective

Zooming out and looking over the history of the budget back to 1980 shows a complete picture and just how extreme the last two years have been. The chart below shows the data on a TTM basis to smooth out the lines.

As can be seen, Expenses have been flat since June of 2021 but Revenues are still moving upwards.

Figure: 7 Trailing 12 Months (TTM)

The next two charts zoom in on the recent periods to show the change when compared to pre-Covid. Once again, the surge in Individual and Corporate Taxes has become very clear. The last twelve months have seen Corporate Revenues reach $398B. In 2016, before the Trump tax cuts, Corporate taxes were only $334B.

Figure: 8 Annual Federal Receipts

With no more stimulus checks (dark brown) and the SBA closing the PPP Loan offering (red), 2022 should fall back down some. It will most likely not reach pre-pandemic levels, but it should get below $6T. There are many factors at play, but for now, the Treasury looks to be in better shape than it has been for some time.

Figure: 9 Annual Federal Expenses

With surging tax revenues and spending set to fall compared to the last two years, the deficit will shrink. Before Covid, the TTM deficit compared to GDP had been trending towards 5% before exploding to 18.6%. It has since come down to 9.6% which has finally passed below the Great Financial Crisis peak of 10%.

Note: GDP Axis is set to log scale

Figure: 10 TTM vs GDP

Finally, to compare the calendar year with previous calendar years, the plot below shows the YTD figures which only include January. As shown, it’s not uncommon for the Treasury to realize a surplus in January; recording one in the 4 years before Covid.

Figure: 11 Year to Date

What it means for Gold and Silver

How will the deficit unfold over 2022? January is a positive start for the year, but it’s unlikely to hold. When tax season ends in April, the data will become clearer. Will revenues fall back as receipts decrease, will expenses increase as refunds go out?

Despite the surge in revenues, deficits will continue for the foreseeable future. As the Fed plans to increase rates, interest on the debt will begin to weigh heavily on the deficit. This could create the dreaded downward debt spiral that makes the deficit explode once more. Gold and silver will hold their value regardless of how things unfold in the years ahead.

Data Source: Monthly Treasury Statement

Data Updated: Monthly on eighth business day

Last Updated: Period ending Jan 2022

US Debt interactive charts and graphs can always be found on the Exploring Finance dashboard:

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