Sunday, August 2, 2009

Year Over Year Change in Gov't Spending

I've made the Table above by reviewing the U.S. Treasury's Daily Treasury Statement for both the fiscal year to date (FYTD) July 30, 2009 and FYTD July 30, 2008.

On the surface, gross FYTD withdrawls from the Treasury's Federal Reserve Account in 2009 have exceeded that of 2008 by approximately $2T, but to get further perspective, I've made some adjustments that remove the effects of temporary transfers and for Treasury purchases of "financial assets".

After adjusting for these effects, it looks like for the 10 months FYTD "real" Federal spending this year has exceeded that of last year by about $542B ($54B per month). This is sort of quantifying what Mike has been pointing out about the "automatic stabilizers" and the U.S. Gov't contribution to recent GDP.

If this trend continues, it looks like this spending will finish about $700B above last year. $700B would be about 5% of last years approximate $14T U.S. GDP.


mike norman said...

Yes, 5% is modest by any measure, but certainly amid one of the worst economic contractions since the Great Depression. To make matters worse the Obama Administration has not ruled out rasing taxes to "pay" for his health care reform. Read here.

Matt Franko said...


Mike well taken on the 5% being short wrt turning around the contraction.

Couple posts ago you reported for GDP:

(Q2 vs. Q1, all figures in billions $)
Pers Cons -$33b
Biz Invest -$87b
Net Exports +$47b
Gov't +$35b

I see the Pers Cons (disaster)
I see the Biz Invest (disaster)
Based on the data in the table above i see the Gov't increase making sense.

But I wonder what is going on with exports? Do you have a link to the GDP report for further look into what we are net exporting? Ag./commodities? I'd like to look into this export number further.


mike norman said...

"Net exports" equals exports minus imports. Imports have fallen, so "net exports" has a smaller negative value and therefore subtracts less from GDP. I presume we are exporting the same stuff--food, services and other things.