The United States government spent $334 billion in the month of November, while only receiving $162 billion in revenue, according to the Treasury Department’s monthly statement. In total, the federal government ran a $172 billion budget deficit and increased the shortfall for the first two months of the fiscal year to $292 billion.
This is the highest budget deficit for the month of November in history, while last November’s was in second place with $137.3 billion. November’s outlays grew from $290 billion the month before, while revenues increased from $152 billion in October, which was the month of the fourth highest deficit ever.
The growth in spending occurred because Medicare healthcare payments were paid out in November instead of Dec. 1 because the day fell on a Sunday.
Compared to the first two months of the fiscal year 2012, the budget deficit is up 24 percent. The budget figures come as the Treasury Department is set to hit the $16.4 trillion national debt limit by the end of the month. At the time of this writing, the Treasury was approximately $30 billion away from hitting its debt ceiling.
Economic Collapse News has reported that if a debt ceiling agreement is not made then the Treasury can implement a number of emergency measures to extend its maintenance of the national debt. Such manoeuvres include suspending investments of the Thrift Savings Plan G Fund, suspending the investments of the Exchange Stabilization Fund, redeeming a certain number of Civil Service Retirement and Disability Fund securities and Postal Service Retiree Health Benefits Fund securities, suspending the issuance of new State and Local Government Series (SLGS) securities and replacing Treasury securities with debt issued by the Federal Financing Bank.
Meanwhile, the fiscal cliff negotiations persist between President Barack Obama and the Republican leadership in Washington. As reported, the president is seeking not only $1.4 trillion worth of tax increases (down from $1.6 trillion) and $50 billion in additional stimulus, but also permanent authority to lift the debt ceiling limit whenever he wishes.
The GOP is calling for substantial cuts and reforms to health and retirement benefit programs. Republican Speaker of the House John Boehner has urged the White House to “get serious,” but the Democrats in Congress blame the Republicans for not getting any deals done.
Although tackling the budget deficit was a key campaign issue for the president, the Congressional Budget Office (CBO) projects that indeed the budget will drop to $600 billion by the end of next year, but it will increase back to $800 billion in 2014 and then continue to rise after that. This would also contribute to the ever-growing national debt.
Since the president took office, he has released four straight trillion-dollar deficits in the federal budget.
“The AP‘s Christopher Rugaber either failed to recognize the reported amount as a record – doubtful in my view given its size – or didn’t think its recordbreaking status was newsworthy,” wrote Tom Blumer of Newsbusters.
The fiscal cliff, which consists of tax increases to 90 percent of Americans and automatic spending cuts to future increases, is approaching. However, some say that the real fiscal cliff is a collapse of the U.S. dollar and the enormous national debt.
Speaking with the Fox Business Network (FBN) earlier this week, Peter Schiff, president of Euro Pacific Capital, said the mainstream media and the Washington establishment are not talking about the bond crisis that will eventually transpire and wreak havoc on the U.S. economy.
“If it [Federal Reserve] continues to print money, it’s going to be a bigger hell,” explained Schiff in the FBN interview. “If we avoid the fiscal cliff, we end up throwing the dollar over the currency cliff because we’re sending a message to the world that America will never pay its bills we’re just going to keep borrowing money until our creditors cut us off. That’s when interest rates skyrocket.”
According to the Treasury, foreign holdings of U.S. Treasury securities is more than $5.4 trillion – China and Japan are the two largest holders of U.S. debt with both maintaining a total of $2.29 trillion. The full list of foreign holdings can be found here.