Despite a monthly record in receipts to the US Treasury, the federal government still managed to run a deficit in December. That’s because the federal government also broke a monthly spending record.
President Joe Biden’s “build back better” spending bill seems to be dead — at least for the time being. But there is still plenty of spending coming down the pike. This raises an important question: how is the Federal Reserve going to simultaneously taper its bond-buying program and monetize all of this debt?
On Monday, President Joe Biden signed a massive military spending bill into law.
Even with the federal government ostensibly trying to limit spending with its head against the debt ceiling, it managed to run another massive deficit in November.
The budget shortfall last month was $191.34 billion, according to the latest Treasury Department statement. That was 31.7% higher than the November 2021 deficit.
The federal budget deficit for September 2021 was $61.5 billion, down from the $171 billion in August. Even though the deficit fell 64% MoM, it was driven primarily by receipts. Spending was up 18.7% MoM but receipts were up 71.2% driven by a surge in corporate and individual taxes.
The federal budget deficit for fiscal 2021 came in at $2.77 trillion. It was the second-largest deficit in US history, just behind last year’s $3.13 trillion shortfall. Despite falling shy of the deficit record, Uncle Sam spent even more money in 2021 than it did during the depths of the 2020 coronavirus recession.
The US government ran a $170.64 billion budget deficit in August, pushing the total fiscal 2021 budget shortfall to $2.71 trillion with one month to go, according to the latest Monthly Treasury Statement.
The mainstream media spun this as good news, noting that the August deficit was 15% lower than the $200 billion spending gap a year ago. This was primarily a function of higher revenues in August 2021 compared to last year. But digging deeper into the numbers reveals the US government hasn’t exactly slowed down its out-of-control spending spree, with spending last month also up compared to last year.
After a briefly shrinking for two months thanks to IRS tax collections, the US government budget deficit ballooned again in July, hitting the third-highest number of fiscal 2021.
The July budget shortfall was $302.05 billion. The only months with bigger deficits in fiscal 2021 were February ($310 billion) and March ($600 billion).
The US government ran yet another massive budget deficit in July. The shortfall was particularly larger on a month-on-month basis with tax season ending and the flow of money into the Treasury slowing. The following analysis puts digs deeper into the numbers and puts them into some historical context.
The US government continues to borrow and spend at a torrid pace, running massive deficits month after month.
The US national debt currently stands at nearly $28.5 trillion. That doesn’t account for the trillions of unfunded liabilities. And there is no end to the spending in sight. There are trillions of dollars in new spending programs coming down the pike.