The Treasury Department released its Monthly Treasury Statement for December this afternoon.
Though Uncle Sam did run a surplus last month, the year-to-date figures are alarming:
It should be pretty clear that the big news in the above figures is that federal spending during the first quarter of the fiscal year was almost 9% higher than during the first quarter a year ago. If the spending increase had been held to only 5%, this fiscal year's quarterly deficit would have come in virtually the same as last year's.
Yet it took these publications the following number of paragraphs to get to the year-to-date spending news:
- Wall Street Journal (requires paid subscription) -- eighth paragraph.
- Reuters -- seventh paragraph, though it did note in the first paragraph that the deficit had widened, and in the second paragraph that "slower growth in receipts failed to keep up with higher spending."
- Associated Press -- fourth paragraph.
- MarketWatch (requires free subscription) -- fourth paragraph. Reporter Robert Schroeder reported that "December is typically a deficit month," even though the government ha shown a December surplus in seven of the ten years prior to 2007 (2006, 2005, 2002, 2001, 2000, 1999, and 1997).
- Thomson Financial at Forbes.com -- eighth paragraph.
For those who are wondering, most of the roughly $58 billion spending increase came from higher interest on federal debt ($15.3 billion), higher military spending ($13.9 billion, probably reflecting higher troop levels in Iraq than a year ago), the Social Security Administration ($12.3 billion), and the Dept. of Veterans Affairs ($5.0 billion).
The decent collections results show that the supply-side tax cuts of 2003 still have some receipt-generating steam left in them. Given the investment disincentives that will only grow as 2010 approaches (because income tax rates are scheduled to increase significantly in 2010 without congressional action), it's reasonable to wonder how much longer the improvement in receipts will continue.
The downplay of the spending aspect of the fiscal year results thus far by the business press virtually assures that it won't get picked up in general news stories, and that the general public will therefore not be aware of it. This will enable presidential candidates to tout new and/or expanded government programs without having to answer difficult questions about what they would do about where spending is already heading.
Cross-posted at BizzyBlog.com.
