Courtesy of Lee Adler of the Wall Street Examiner
The media has a little explosive diarrhea today in reporting that the US July budget defecate had shramatically drunken. While noting that “$35 billion in monthly recurring benefit payments that would have been made in July were accelerated to June because July 1 was a Sunday,” Bloomberg’s reporter neglected to point out the obvious that that would have negated the shrinkage. In addition, Bloomberg neglected to note that a whopping $23.4 billion end of June semi-monthly withholding tax collection that would normally come in June was delayed until July 2, again, a calendar effect due to June’s last business day being Friday, June 29. Negating those two calendar effects, the budget deficit for July would have been up, not down.
Here’s how they handled it.
The U.S. government’s budget deficit narrowed in July, as spending dropped by 11.9 percent from a year earlier and some payments were accelerated to the previous month for calendar-related reasons.
The gap shrank 46.2 percent to $69.6 billion from a $129.4 billion shortfall in July 2011, the Treasury Department said today in Washington. Last month’s gap was smaller than the projected $90 billion deficit, according to the median estimate in a Bloomberg News survey. For the first 10 months of this fiscal year the deficit was 11.5 percent narrower than in the year-earlier period.
“On an underlying basis and absent policy changes, it appears that we are on a path for the deficit to narrow by roughly $100 billion per year,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. That is “moving in the right direction but not nearly fast enough,” he said by e-mail before the report.
via U.S. July Budget Gap Narrows on Lower Spending, Payment Shifts – Bloomberg.
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