Grim Milestone: Per CBO, Feb.-April Spending Will Top $1 Trillion; Will This Be News?
Early each month, the Congressional Budget Office (CBO) issues its "Monthly Budget Review." Its purpose is to estimate and comment on the federal government's budget results for the previous month a few days before the Treasury reports its official results.
CBO's most recent review, issued on Friday (2-page PDF), estimates that Uncle Sam's outlays during April amounted to $330 billion. If that number holds up, or overstates actual results by less than $2.2 billion, it will mean for the first time ever that our government officially spent over $1 trillion in a three-month period (an estimated $330 billion in April plus a reported $672.2 billion in February and March combined). Regardless, February through April is certain to eclipse May-July 2009's previous official all-time high (after TARP-obfuscating accounting adjustments; go here for the detail) of $948.7 billion.
This certainty, the detail behind it, and the federal government's real long-term track record make mince meat of the following off-the-cuff assessment of why federal receipts and spending go up and down made Saturday by Alan Fram at the Associated Press:
A strong economy brings the government more revenue and lower spending. A weak economy in which the jobless and poor need more support does the opposite.
We wish, Alan.
Spending in nominal terms has increased in every fiscal year since at least 1970, whether the economy has been weak or strong, as seen below (source data mostly here):
Spending in real terms has declined only four times since 1970. Overall, if the White House's February estimate of full fiscal year 2011 spending is correct, real spending will have increased by 236% since 1970 (i.e., it will have more than tripled). In the past four years, spending in real terms has increased by just under 30%. Even after the stimulus has been largely spent and was supposed to go away, and even though spending on the jobless and poor is down, the money out the door just keeps going and going and going, now at an annualized rate of $4 trillion a year.
Let's see if the folks at Alan Fram's wire service, the New York Times, or any of the alphabet establishment broadcast outlets report the all-time record level of three-month spending. Based on searches on "CBO" and "Congressional Budget Office" (entered without quotes) at AP's home site, the "Essential Global News Network has not seen fit to take notice of it. I'm betting it will still be one of the best-kept secrets in America at the end of the week, even after the Monthly Treasury Statement is released on Wednesday.
NOTE: The true record (as opposed to the "official" record) for three-month spending occurred in February, March and April of 2010. $115 billion should be added to the official spending in those months of $875.1 billion for a total of $990.1 billion for the March 2010 TARP-related adjustment explained here. If February through April 2011 comes in above this level, which seems almost certain, it will break the true record as well as the "official" one.
Cross-posted at BizzyBlog.com.