"Economists are pessimists: they've predicted 8 of the last 3 depressions."
--Barry Asmus

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Friday, December 10, 2010

Bright Lights, Big Deficit

Here we are in Fiscal Year 2011 (as far as the US Government is concerned), and the Monthly Treasury Statement has been out for 2 1/2 hours now without a comment from me. This is a monthly release showing the highlights of what kind of stewards of the money we provide to the government to handle it's operating expenses (i.e. taxes). In October, we had a budget deficit of $140.4 billion dollars. Moving forward a month, the analysts were expecting the November budget deficit to be $130.0 billion. How did the government do with our money?
Not to put too fine a point on it, any reasonable financial planner would suggest that the government - if it were an individual coming in to his office to talk about his assets - talk to a credit councilor. Or consider bankruptcy.. In the month of November the US government had $145.96 billion in receipts and $299.355 billion in outlays for a total budget deficit (that month) of $150.394 billion dollars[1]. Year to date - and that means October and November - receipts have been $294.912 billion and outlays have been $585.738 billion, for a net of -$290.826 billion[2].
Coincidentally enough[3], Treasury prices ended down today. The 5-year note yield was up 0.102, the 10-year note yield was up 0.121, and the 30-year yield was up 0.038.
[1] To put that in perspective, it's something like having a monthly take-home salary of $4,000 and then putting $8200 on your credit card during Black Friday.
[2] Like [1] above, but doing it every month.
[3] Nah. Not really.

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