July’s Federal Deficit

Our Treasury Department reports the U.S. had a budget shortfall in July of $69.6 billion.  Understand, that is how much we overspent in just those 31 days.  While that may seem like a lot, we need to put it in some sort of context.  Give me a second to do so.  Okay, there; now you see?  $69.9 billion doesn’t just seem like a lot, it seems like a whole heap of a lot.

Sorry, I didn’t mean to get you upset.  Let me take a different angle on this.  Wow, the month’s budget deficit was the lowest we have seen in five years!  It came in over $30 billion less than consensus.  In fact, with the nation having now completed the tenth month of its fiscal year, our Treasury’s deficit is running some 11.5% less than what we saw at this same time last year.  We have only gone in the hole by $973.8 billion so far.  There’s progress for you.

How can we explain this fortuitous turn of events?  First, receipts are climbing, up 6.1% for the fiscal year-to-date.  Corporate taxes have jumped a whopping 29.8% to $182.4 billion, suggesting some things have been going very well for businesses.  Income taxes paid by individuals now total $928.2 billion over the same period, up a shade over 4%, also a bit encouraging.  Topping it all off, spending stayed relatively flat, actually declining some 0.4%.  A 3.2% drop in defense spending helped keep this side of the balance sheet in check.  I certainly hope this answers all those nattering nabobs of negativism who assert you can’t get out of debt by borrowing money.