The budget deficit for the first three months of the year is already larger than all of last year.
NEW YORK (CNNMoney.com) -- The federal budget deficit expanded by $83.6 billion in December, the Treasury Department reported Tuesday, bringing the total deficit for the first three months of the 2009 fiscal year to $485.2 billion.By comparison, the budget deficit for all of fiscal year 2008 was $455 billion. In fiscal 2007, it was $161 billion.
It's a good thing we have no intention of ever paying off all that debt, otherwise this would be an immoral thing to do to our children.
Red Ink, But trade deficit declines
AP is also updating.
The trade deficit dropped by 12%, but that is mostly due to the bubble burst of crude oil.
Exports also dropped by 5.9%.
A very good piece of news (but maybe not who believe China and the United States economies are completely intertwined) is China trade deficit dropped by 17.5%.
More meaningless numbers from the government
The numbers being quoted are the budget deficit, not the operating deficit, and as we all know, there is considerably government spending on wars, banks and the like that occur off-budget. The same article refers to the deficit for the entire 2008 fiscal year as $455 bn. But the government borrowed $758 bn to fund that $455 bn deficit. Cute, huh. More government numbers that are functionally useless.
I'm sure that others would find it very interesting that the aggregate debt issued by the government has shrunk by $150 bn dollars between the first of December and Jan 12. And surprise, surprise, the yields on short-term debt were really hammered in December. I hear the pundits blathering on about extraordinary demand, but what's actually happening is a restriction of supply, possibly coupled with sustained but declining demand. Bid/cover ratios at treasury auctions for short term debt have been dropping ominously.
And of course aggregate debt dropped while government spending on the "budget" outpaced income by some $85 bn. How does that work? I suspect that Paulson is manipulating treasury issuance to smooth out the last days of the Bush mal-administration and leave the Obama administration holding the bag. Honesty and transparency is sadly lacking and its we the people that pay the price.