May 2017 Cash Deficit: $107B

The May 2017 Cash Deficit came in at $107B.

That may not look great YOY, but the big expense spike was timing related, and expected. On the revenue side, we got a $20B bump from the FCC…I’m assuming spectrum auction revenues, and otherwise solid revenues with an additional business day as well…

Put it together and the YOY deficit through 5 months is actually down $3B as revenues are at +3.7% while outlays are up about 3%. I wouldn’t count on the +3.7% sticking…+2.0% looks a bit more realistic once you pull out the one offs, but regardless, here we are with a very slightly improved deficit. It’s still not great, but we’ll take it!!

April 2017 Cash Surplus: $206B

I can’t make any promises…time has been scarce as of late, but hoping to just post the chart today and give a more detailed analysis later.

Looking at the month, revenues were solid and timing issues compared to last year brought down expenses as expected, but don’t worry, we’ll be back to even 5/1. Regardless…A $206B surplus isn’t too shabby, so let’s enjoy it for just a moment :).

Looking at the year through 4 months, revenues are up about 1.5%, nothing impressive, but we’ll take it. The outlays are down, but that’s a little misleading, come tomorrow’s 5/1 report the timing issue will fall off and we should be back in the +3% range.

All together…this was a decent month…nothing earth shattering but sometimes simply not being terrible can be a really big win 🙂

US Cash Deficit-March 2017

Running late so here’s the chart:

So that looks really bad….some of it was timing, but some of it was just plain ol’ bad…I’ll try to get a detailed write up out in the next week. Enjoy!!



March 2017 Deficit Preview

Just a quick preview of what March is looking like with 2 business days left:

The story so far is that refunds are up as expected, hurting net revenues, while corporate tax deposits are down 52% to just $18B compared to $38B last year. I wonder if companies pulled a lot of cost forward into 2016 thinking Trump would cut taxes in 2017? That’s not looking like such a safe bet anymore. The deficit currently sits at 119B…an estimate thanks to the “Extraordinary Measures” currently deployed. With April 1 on a weekend, a lot of outlays are going to be pulled forward and paid March 31, so a deficit in excess of $150B is pretty likely, though that will make April a little better….depending on the strangth of tax receipts we could post a $200B surplus…hopefully they don’t experience the same collapse we are seeing in corporate taxes.


We will have the March finals next week so check back for an update. Also, please check out my latest over at seeking alpha Back To The Future: King Coal Takes Back His Crown From Natural Gas where I investigate the surprisingly quick resurgence of coal in the last few weeks….hint…it’s due to the increase in the price of natural gas….not Trump’s tweeting 🙂 For updates sign up as a follower…Enjoy!!




Here We Go Again (Debt Limit 2017)

Will we never learn? Without a lot of fanfare, the debt limit was reinstated on 3/15/2017 at $19.809T and Treasury instituted the infamous “Extraordinary Measures” (EM) to circumvent the law and give our politicians more time to make fools of themselves.

Extraordinary Measures??

First off…what are Extraordinary Measures?  For me, they are a huge pain in the rear. You see, calculating the “cash” deficit is actually a very simple exercise…we look at the change in cash balance, and adjust it for the change in debt…and voila!! So for example on 3/3/2017 the cash balance dropped by $22.080B and the debt decreased by $235M. Add them together and we get a daily cash deficit of $21.845B. Of course you can add up all of the revenue line items and subtract out the outlays….and come up with the exact same answer. Of course…I actually do that as well, but you don’t need all of that complexity to calculate the cash deficit. In any case, EM nukes my process, and while I can back into a decent educated guess, unfortunately I won’t have an actual number until these shenanigans are over. The margin of error is ~$5B a month, which actually isn’t bad, but still enough to drive the accountant in me a little nuts.

The mechanism for EM is actually quite simple…they take some parts of the debt…I can’t remember specifically off of the top of my head but things like federal retirement funds…and simply pretend thy don’t exist(a little at a time). This simple move lowers the official debt outstanding, allowing them to continue to issue new debt. When the debt limit is ultimately increased, they just pull all of the EM debt they were pretending didn’t exist back onto the balance sheet resulting in a huge one day increase. Last time we played this game back in late 2015 the result was a $339B increase, so it seems reasonable to think they can squeeze about $350B of EM this time.

How Long Do We Have?

Last time around the timing of the debt limit was the same if I recall…debt limit reinstated 3/15/2015, and EM used to get us all the way to the resolution in early November…so over 7 months. As I stated back then…the middle of March is just about the best possible time for a debt limit standoff because the huge outflows of tax refunds are pretty much behind you, and you are just a month removed from a huge inflows in April which as of late have been running in the ballpark of a $200B surplus. With an April surplus and $350B of EM…and getting to October/November again seems like a pretty solid bet.

Cheney was right…Deficits Don’t Matter(Anymore)

Here is what I know…the US debt/deficit is a massive problem. It will blow up, and there will be a lot of pain….maybe worse. This will happen…I am 100% certain of it. The window to fix it has now closed….I’m not sure it was ever really open. Could be this year…could be 20 years from now…but it will happen.  But since it’s going to happen, I’ve stopped worrying about it. Why should republicans who don’t care about the deficit and democrats who don’t care about the deficit fight over some measily $15B here or there…when obviously the American people don’t care about the deficit either? Just hours ago….the republicans plan the shoot down the much hated and relatively new entitlement(ACA…AKA Obamacare) went down in flames despite Republicans having the presidency and majorities in congress. This is the system that is going to fix $20T in debt…growing at ~1T per year indefinitely? Hah!!

My thoughts on the matter have changed a lot over the last few years as I have accepted this reality. Rather than worrying about it…we should just enjoy it as long as we can. As long as there are still suckers around willing to buy “risk free” US debt…let them!!  So this is my advice to Trump and the Republicans….stop pretending to care about the debt…we don’t believe you…you aren’t impressing anyone, and honestly nobody even cares anymore.  So forget about it and go big on things people do care about. Tax cuts, jobs, infrastructure,trade, immigration….heck maybe break up the medical industry that seems more interested in financially screwing us over every time we walk into an office or hospital than actually improving health.

So pass the silly debt limit increase or better yet just get rid of it….then get to work!!