The Daily US Cash Deficit for 7/25/2013 was $6.6B bringing the July 2013 deficit through 25 days to $97B with four business days remaining. I had expected to see some $4B in revenues from the states related to unemployment but it did not come through today. When it does, it should help trim a bit off the deficit. At the beginning of the month…I estimated the ending deficit at $80B. Getting $17B of surplus over the next 4 days is probably going to be a stretch, but stranger things have happened.
The US Daily Cash Deficit for 7/10/2013 was $9.5B pushing the June deficit through 10 days to $72B. With 1/3 of the month gone…revenues are up a meager 4%. This will be helped some by an extra day vs 7/2012…perhaps as much as a $10B (or 5%) bump, but August should give that right back. Outlays…adjusted for timing look more or less in line with last year, perhaps a few billion lower.
Over at money.com Jeanne Sahadi has a front page article that is trending U.S. books $117 billion surplus in June. It’s not a terrible article, but the ignorance displayed in the comments section is a bit frightening. Everybody thinks we are saved….We aren’t. No doubt, 2013 is going to be a material improvement, but it is still going to be a $700-$800B deficit. So yeah…it’s great that we aren’t blowing through $1.6T per year anymore like we were not that long ago…. but $800B per year…with $17T accumulated…no matter how you look at it…that’s a huge hole, and we’re still digging at a ferocious pace.
Above is the latest output from the model I use. We can see clear and steady improvement from 2009 forward as revenues picked up and cost was more or less held constant. There is no rocket science in the model. After spiking 12% or more in 2013 on tax hikes, I assume most revenues will grow at 5% in 2014 and 4% from there on…more or less in line with historical patterns. On the cost side, I assume 2% or so annual growth from 2014 on for most outlays, with a few notable exceptions. Social Security grows at 6-7%, and interest grows along with debt outstanding, but it held at about a 1.8% effective rate…extraordinarily low. For Medicare, Medicaid, and the Affordable Care Act, I use the CBO’s numbers. Using these fairly simple, and I believe realistic assumptions, I show we bottom out in 2013/2014 on increased revenues, before heading back up as spending increases on Social Security, Interest, and Healthcare outpace and run away from the modest annual revenue gains. Note…this all assumes no recesions, crashes, wars ect… although historically, it seems quite unlikely we will go another decade with out some kind of economic disturbances. I guess what I am saying is tis may end up being a conservative forecast unless the CBO is correct, and we manage to string together a few more years of 10%+ revenue gains. We all know anything is possible, but historically, it seems quite unlikely. Guess we’ll have to wait and see.
The US Cash Deficit for 5/21/2013 was $5.2B bringing the May 2013 deficit through 21 days to $103B. Once again, 2012 and 2013 are more or less aligned, with each having 15 business days M-F. Just as last week…nothing very impressive here. Revenue up 1%, cost up 2%. All this is a far cry from what we saw last month with revenues spiking 26%. We do see tax deposits withheld up 10%, consistent with what we have been seeing all year, but this has been offset by decreases elsewhere, notably unemployment deposits from the states, federal reserve earning, and TARP. With 7 business days remaining, May is looking like a rather unimpressive follow up to a spectacular April.
On the Debt limit, cash was down $6B to $31B. No sign of “extraordinary measures” yet…just a dwindling cash balance and a lot of payments due by May 31.
