Well, new US financial figures are out. And they show that Uncle Sam is in a world of hurt, financially speaking.
And if you thought things were improving: think again. It’s looking worse compared to the same period last year.
Since the beginning of the new fiscal year on 1 October, the Federal government has taken in $346 billion in revenue. That’s actually up roughly $30 billion from last year, or nearly 10%. So revenue is rising.
However, during that same period the Federal government has spent roughly $638 billion – an increase of $87 billion, or about 14% more than the same period last year.
Short version: income – $346 billion (+10%); spending – $638 billion (+14%).
Somehow, I just don’t think we’ve had the kind of population growth in a year to warrant that kind of spending increase. Or that much inflation, either.
I’ll save you the trouble of doing the math. Since 1 October 2012, the Federal government has borrowed 46 cents of each dollar it has spent.
Why? That’s primarily due to higher spending on “mandatory” spending – like Social Security, Medicare, and debt interest payments. In other words: the problem is largely due to entitlement programs for the general population and debt interest. Seems these programs are growing faster than expected. Go figure.
News flash, DC: at some point, “mandatory” becomes impossible if you can’t come up with the cash. And it looks like we’re approaching that point PDQ.
But there’s no need to worry. According to the CBO, the picture is “distorted” by “unbalanced payments”. The situation’s really better this year than last says the CBO.
Well, here’s my response to the CBO:
When same period last year shows 10% less income but 14% less spending, that doesn’t mean things are getting better – no matter how you try to spin it. It means things are moving in the absolutely wrong direction and are getting worse.
It also looks like we almost certainly had another $1,000 billion ($1 trillion) Federal deficit for Fiscal 2012, which ended on 30 September. At the current pace, it looks like that’s almost certainly a lock for Fiscal 2013 as well. And unemployment is back above 8% again – if it ever really went below 8% in the first place.
At least the current Administration is being consistent. I’m just not sure that’s exactly the kind of consistency the US wants.