For the first time since 2009, US Deficit Spending On the Rise.
Importantly, receipts are up only 1%, but government spending is up 5%.
The deficit does not count “off budget” items like Social Security and student debt, but let’s take a look at what they do count.
The U.S. budget deficit as a share of the economy widened for the first time in seven years, marking a turning point in the nation’s fiscal outlook as an aging population boosts government spending and debt.
Spending exceeded revenue by $587.4 billion in the 12 months to Sept. 30, compared with a $439.1 billion deficit in fiscal 2015, the Treasury Department said Friday in a report released in Washington. That was in line with a Congressional Budget Office estimate on Oct. 7 for a shortfall of $588 billion. As a share of gross domestic product, the shortfall rose to 3.2 percent from 2.5 percent a year earlier, the first such increase since 2009, government figures show.
“The slowdown in tax collections suggests some cooling in labor market activity,” said Gennadiy Goldberg, a strategist at TD Securities LLC in New York. He sees the higher budget deficits implying more borrowing needs by Treasury.
The Treasury said receipts in fiscal 2016 totaled $3.27 trillion, or 17.8 percent of GDP, while spending totaled $3.85 trillion, or 20.9 percent of GDP. Receipts rose $18 billion from fiscal 2015, while outlays jumped $166 billion, the figures showed. The department cited higher spending on Social Security, Medicare, Medicaid and interest on government debt.
For September, which is the final month in the fiscal calendar, the government reported a $33.4 billion surplus. That was lower than the $90.9 billion surplus a year earlier, in part due to calendar adjustments, according to the Treasury.
Receipts Up 1 Percent
Slowing receipts in the face of all this alleged hiring suggests the alleged hiring is way overstated. This is yet another sign that failure to weed out duplicate social security numbers results in double-counting employment.
One way or another, whatever jobs we do create have not done much for tax revenue.
Mike “Mish” Shedlock
I hate seeing that graph use a label of “Clinton” budget surpluses. It’s a bit like an architect producing a set of house plans for a split level ranch and being congratulated on the georgian colonial that the carpenters then built.
problem is the 2 largest job creators gov’t and Walmart offer zero (less than zero) return,gov’t “services” provide little intrinsic value,and no welfare checks and drone strikes is not “value”,and Walmart paychecks barely clears poverty line ie collapsing tax revenue soaring deficts econ 101
This is further proof that the economy is growing at 1% rate AT BEST!!
All of the forecast for recovery and growth are wrong. The policies of taxation and regulation are killing growth and decreasing wealth.
Government is the problem not the answer!!
T-a-a-a-c-k-s the RICH!!!!!!!!!!
Yes, Tom, except Republicans hate taxes and Democrats love the rich.
Joe Sixpack is lead to believe that his dentist is some rich guy. He worked his butt off and has 90% of his net worth tied up in his practice. Or that the neighbor with a camper parked on the driveway that her family vacations with a couple of times a year must be really wealthy.
Meanwhile, super duper wealthy elitists have purchased control of the Democrat Party. Globalists like GE’s Jeff Immelt brag about it while holding positions such as “jobs czar” whatever in Sam Hell that is supposed to be.
Republicans figure every dollar that goes down the government sinkhole of taxes will never see the light of private sector day again, which is as silly as the wealthy dentist.
Ready yourselves for President Kaine. Not sure whether Hillary’s Parkinson’s will kill her before she’s impeached, but that diseased whore won’t finish her 1st year in office. I don’t know a lot about Kaine, except that he’s a rather screechy, preachy, smarmy little bitch.
Can only be an improvement.
Americans have no issue with spending money….we are champions at it. What do not like is getting nothing for it…or worse still having our money used against us by creating an entitled class of people who will only demand more and more. Half of Americans pay no income taxes now and as such we have effectively defeated a constitutional democracy that was supposed to protect people’s property. Further, the underhanded nature of government creates the illusion that it is ALWAYS someone else who pays the taxes by taxing those who provide our goods and services and JOBS, pretending that all those taxes will not ultimately be borne by the very consumers and employees who were lead to believe they had dodged the tax man. We have no idea how much of our spending is actually funding taxes and other government induced expenses incorporated into the products and services purchased. And they don’t want us to know. Sadly, business doesn’t push back against taxes very vigorously as long as they are applied uniformly so as to not create specific competitive disadvantage.
I would submit that many if not most people would gladly embrace paying at least half their income to taxes if they truly believed they were receiving real value for it….but we are not….not even close. Instead we see the super wealthy, those on the front lines of the crony trough, becoming incredibly wealthy while everyone else dries up and blows away.
Unfortunately, the only way this will be corrected is to remove the cash, stave them into submission.
Keep taxes low and muster all the transparency and accountability we can.
A consumption tax period. No avoidance, not deductions, no foundations.
Any tax on activity, is nothing but an unlimited license for government to spy on people. Period. There is no meaningful difference between “consumption” taxes and “income” taxes.
In addition, just like the well connected gets to define “income” in such a way that theirs are somehow not counted for tax purposes, consumption taxes will result in the same. I can guarantee you whatever Goldman Sachs chooses to sell you, won’t be counted as consumption, hence not taxed. While if you spend your money on something made by a mere equal, here comes the taxman….
The only two taxes that are simultaneously simple and just, as well as don’t depend on a massive spy apparatus to administer, are tariffs and taxes on real property/land.
The Feds already need to keep some sort of control over what crosses the border inbound. hence need to snoop on that anyway. Charge for it. Then mark the charge up enough to provide a chunk of the general budget.
Similarly, anyone who wishes to claim a chunk of the land between “California and the New York Islands” as exclusively His Land, and then expects the government to help him enforce that claim, can’t very well not tell the government about what land it is. So, again, no gratuitous license to spy, simply for the purpose of collecting taxes.
So, tax those two, to obtain whatever little revenue a legitimate government may need, and otherwise do not tax anything at all.
Greed is good,spending is good. Thrift is bad and must be punished!
Who do you think buys those Treasury bonds? Savers.
Medicare and Medicaid payments are the time bomb that will do this nation in. Combined we spent over $1.4 trillion on those health care programs in 2015. Greater than a 9% increase over 2014. Illegal foreigners are now entitled to sign up for Medi-Cal (Medicaid equivalent) in California.
Deficits and debt loads will push us under.
If crooked Hillary moves into the White House again with her sexual predator husband we’re done. It only gets worse. And the crooked media has demoralized some Trump supporters with an onslaught of manufactured propaganda – to the point that some have surrendered and are going to either not vote or throw their votes away in protest, thereby falling right into the trap set for them by the establishment.
It’s all for one and one for all. All good men and women must now turn inward and do what they must to protect themselves and their family. The nation is a lost cause. Whatever protections we had against tyranny are gone. The political system, the courts and now the media have turned their backs on us.
Good luck to all.
So what strikes me most is the extrapolation, where is the analysis for the almost exponential uptick over the next decade? On face value, the graph suggests a flattening curve and that we may have begun to get this thing under control. Your comments Mish?
Jobs constructing the wrong mix of products for the market are temporary. Debt beyond a certain level is counter productive. Both for the economy, and bankers who will then demand to be bailed out.
Mish, I believe that the deficit is considerably understated because the Fed has reduced the cost of borrowing to pocket change. If the Government was actually paying interest on the Federal date at 5-6% the expense side of the equation and the deficit would be considerably higher. On the income side, if investors were actually receiving 5-6% on their fixed income investments they would receive more taxable income, the velocity of money would be higher, and total tax revenues would be higher.
“Slowing receipts in the face of all this alleged hiring suggests the alleged hiring is way overstated. This is yet another sign that failure to weed out duplicate social security numbers results in double-counting employment.”
Yes, and there is a reason for it. Politically appointed department heads want it that way (double-counting to goose the numbers). Bureaucracy 101, to help the political party that got them the job. Political operatives, lackeys and dunces manipulate the system via rules, turning honest employees into drone-like Propaganda Ministry bureaucrats who are just honestly following the rules while putting out false numbers.
You could probably use computer algorithms and artificial intelligence to program the same results, at less cost. The department head counterparts in the IRS performed a similar function for the party in power by denying certain political groups non-profit status. Both parties do it, when in power. Hillary will certainly ramp it up. Trump, being in opposition to the GOP elite, is a real wild card. You have to go back to Andrew Jackson to find a counterpart to Trump.
Andrew Jackson……founder of the democrat party. Slave owner, institutional rapist. Fitting.
Washington, Jefferson, all slave owners, too; and some say the whole lot of them should be removed from the currency and history textbooks to be replaced by non-whites and women. Trump at least pays his employees, does not use slave labor. But you miss the best parts about Jackson. Jackson got into a Trump-like fight with the top national banker, and revoked the central banking money monopoly of his day; and it never fully recovered until 1913 when the Fed was formed. Plus, Jackson killed 17 people in duals, which has to top Trump’s trash talk for the TV cameras. Clintons probably have higher killing numbers, if you include Serbia, Libya, and all the USA-backed mercenary armies operating in the Middle East; moderate rebels et al. are all euphemisms for mercenaries, hired killers getting a paycheck (something the mainstream media turns a blind eye to and fails to acknowledge).
American media has their heads up their collective asses, being Puritanical about trash talk apart from shock jock talk radio. I had a neighbor who used to blast Howard Stern in the mornings, and Trump is not even close to that guy in daily quantity. Nor can Trump top Stern’s language. Compared to Stern, Trump’s Bush tape is wimpy, to use a polite term. But that’s show biz.
Talk about outsourcing and China, Jackson would have found that all that talk quaint and dainty nonsense. Jackson twice renounced his USA citizenship, once to become a Spanish citizen and once to become a French citizen. Jackson said it was good for his business to completely outsource himself from the USA. Voters back then had no problem with it, and elected Jackson multiple times. The first time Jackson won the presidential vote, he had the election stolen from him literally in the House of Representatives. Been plenty of other stolen elections in USA history, including Democrats selling out their own candidate and handing a presidency to the Republicans in return for removing troops from the South after the Civil War and allowing implementation of Jim Crow. So, nothing new about stolen presidential elections in the USA, though ignorant Americans may think otherwise.
Don’t have to go any further than Canadian hemophiliacs to get 6,500 dead from Clintons. ADC (Arkansas Department of Corrections) sold blood through middlemen to the Canadian Red Cross, from 1979 through 1994 – the entire time Bill Clinton was governor. The guy who stopped it (Governor Tucker) was thrown into prison. To this day, the Canadian Red Cross is not allowed to have any part in collecting or distributing blood in Canada.
Or Haiti. How many Haitian lives would be saved if the $9.9 billion US the Clintons collected for “Haiti” actually went to people in Haiti? At population 10.5 million, that’s $940 per Haitian, or 80% of Haitian GDP. Assuming 40% of GDP going to food, enough to feed all Haitians for 2 years. Assuming 20% dietary deficit, enough for all Haitians to eat well for 10 years.
Mish,,,, maybe you can explain this…. The news reports that in FY 2016 the budget deficit was $587 Billion or so dollars. If one goes to a website such as National Debt to the Penny you will find we borrowed $1.4 Trillion in FY 2016. A difference of about $900 Billion…
The question.. What was that extra $900 Billion or so spent on???
My guess is much of it is rolling over old debt. As debt matures, money is borrowed to pay off the principle.
A few months from now expect to see a slew of news stories about how spending by the Federal Government boosted the economy and the GDP in the third quarter. This would explain why the direction of the economy has been so hard to read as of late.
Economy pumping is not an uncommon practice before an election but it is important we factor in its influence when attempting to determine the true strength of the economy. Below a close look at some of the factors that will shape things going forward.
http://brucewilds.blogspot.com/2016/10/government-spending-is-boosting-growth.html
I looked at the accompanying pdf files on revenues and expenditures and noted the following:
-social security receipts were up close to 40 billion which would run counter to the claim that employment is not recovering
-corporate tax revenue was down by almost the same amount. This was the largest driver of net changes year over year on revenue.
-big increases in Medicare spending
-big increases in Veteran Affairs spending
– big increases in interest on public debt
One of the biggest unanswered questions in my mind is how has the government responded to the fact that social security no longer throws off massive structural surpluses? This may explain why we have increased interest liability on public debt. Surpluses in Social Security reduced the amount of public debt issuance.