Remember when we showed that the "stealth" secret sauce behind Bidenomics was nothing more than a massive, multi-trillion debt-fueled spending spree, which led to the biggest peactime, non-crisis budget deficit in US history, with the total deficit for fiscal 2023 ending just over $2 trillion, or double the prior year, something which BofA's Michael Hartnett called the "era of fiscal excess"?
Well, we have news for you: if 2023 was bad, 2024 - an election year of course - is shaping up to be far worse.
Moments ago the US Treasury reported the budget deficit picture for December and it will come as no surprise to anyone that the US has continued to spend like a drunken sailor, or rather, even more. As shown in the chart below, in the month of December, the US collected $429 billion through various taxes, while total outlays hit $559 billion...
... resulting in a December deficit of $129.4 billion.
This may not sound like a lot, but December is actually one of those months when the US deficit is relatively tame, or used to be.
As shown in the next chart, traditionally the December deficit was barely in the $10-20BN range... until 2020 when it exploded to an all time high of $140BN. And while it dropped sharply in 2021, it rebounded dramatically in 2022, and rose to just shy of the December crisis high last month!
Here is some more context: tax receipts of $429.3BN in December were down 5.6% from the $454.9BN in December 2022 and down a whopping 11.8% from December 2021. On an LTM basis, US total tax receipts were $4.521TN, or down 7.2% YoY. This is now the 9th consecutive YoY decline in LTM tax receipts, something that historically has only taken place when the US was in a recession. As an aside, the "smart economists" were certain that the collapse in tax receipts would reverse after November when the postponed California taxes would be collected. Well, November has come and gone and the big picture is just as ugly.
Looking at outlays, unlike tax receipts, there is danger of a decline... ever; and indeed in December the US spent a total of $559 billion, up 3.5% from the $540BN spent a year ago, and up even more from the $508BN in 2021. On a 6 month moving average basis, we are rapidly approaching the exponential phase even when accounting for the spending burst in 2020 and 2021.
Putting it all together, we get the scariest chart of all: the YTD budget deficit three months into fiscal 2024 is already $509 billion, which would be the biggest deficit in US history after one quarter with the exception of the covid outlier year of 2021 when the US injected multiple trillions in stimmies.
As for the final, and most shocking, data point, the December budget deficit of $129.4 billion was more than $40BN higher than the $87.5BN median estimate, and was more than 50% higher compared to the $85BN December deficit in fiscal 2022.
Needless to say, this is completely unsustainable and assures fiscal collapse for the US, not if, but when. Then again, we already knew this thanks to the CBO which was kind enough to chart the endgame:
What is funniest about all this is that the US is on an accelerating path to ruin less than one year after the imposter in the White House published this laughable propaganda.
We can't wait to see what really happens to the budget deficit over the next 10 years. Spoiler alert: there won't be a happy ending.
