November 2017 Federal Deficit

Two months into America’s fiscal year 2018 and our nation’s deficit has climbed 10.6 percent versus a year earlier according to data from the Department of Treasury.  Your government’s shortfall was $138.5 billion in November 2017.  Both receipts and outlays increased versus a year ago, symptomatic of an improving economy. 

Growing income tax receipts helped support the government’s activities, but corporate taxes declined in the period.  Aided by an improving economy and labor market, Americans paid 7.6 percent more taxes than a year ago.  Interestingly, corporate receipts were negative in November, indicating a net refund to firms. 

Contributors to the growing outlays were varied.  A few standouts include the Department of Agriculture (up 11.4 percent), the Social Security Administration (up 9.7 percent), and Veteran’s Affairs (rising 4.1 percent).  Outlays for the Department of Defense fell 1.7 percent versus a year ago.

Interest on Treasury Debt rose once again.  Compared to a year earlier, interest payments grew 32.7 percent!  For some perspective, interest payments were equal to 84.7 percent of the nation’s defense spending in November.  Put another way, nearly 11 percent of America’s spending in November went to paying interest on the debt. 

There are many schools of thought on how the nation’s deficit should be managed.  Some believe it needs to be reined in as soon as possible, while others think it is unimportant given America’s status as the largest economy in the world with a stable political and monetary system.  Atlas is not equipped to be experts in fiscal policies, but spending 11 percent of the nation’s income on interest does not seem like a good idea.  What do you think?