Happy New Year!

Instead of using a normal calendar, our country runs on a fiscal year that ends each September.  Thus the U.S. Treasury was recently able to report just how prudently they managed on our account during the first month of this new year.  It wasn’t so hot.  I suspect you or I would get institutionalized if we behaved the same way.  They overspent by $176.4 billion dollars.  Of course that may not look so bad when you consider it’s just a touch over last October’s $155.5 billion dollar deficit.  Part of the problem relates to earnings, although I’m sure many would agree with me that the government rarely really works.  Anyway, year-over-year receipts fell for the month by 18% even as spending increased 6%.  Blame our current recession for the short fall and ongoing stimulus for the jump. Obviously, if we have just begun a new year we must have ended one as well, so how did we do for the last 12 months?  Our deficit for last year totaled $1.42 trillion, which means it pulled off a triple plus over the prior year’s $454.8 billion dollar miss.  While prudence has not been a hallmark of government spending (the average October deficit has been $61.7 billion for the last ten years), we can only marvel at this stunning performance and wonder how the bills are going to get paid.  No doubt the trend will continue to weigh on our dollar while bolstering the case for precious metals and other such inflation hedges.