Sunday, January 20, 2013

The US Deficit Fast  Disappearing


The U.S. December budget deficit was just $260 million. This is according to the latest Monthly Treasury Statement from the Financial Management Service.

Economists were forecasting a deficit of closer to $1 billion.

The December deficit was also the lowest December number since 2007, reports Bloomberg.

It's worth noting that monthly numbers are noisy, and that seasonal factors tend to be considerable in December.

Regardless, this is an encouraging sign.

Receipts were $269.5 billion while the spending was $269.7 billion.  This is important to remember, because budget deficits and surpluses aren't just about spending levels.  Indeed, growth plays just as important a role.

As GDP grows, the deficit shrinks.  To better understand this, read this and this.

Here's a look at some historical numbers.


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      budget

Treasury
budget balance


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