Thursday, December 31, 2009

2009 Fiscal Review

Ive posted the year end DTS withdrawal details for both FY2008 and FY2009 below to compare YoY fiscal details.



I've highlighted 5 line items that show the largest YoY increases in withdrawals from the Treasury account that do not include purchases of financial assets (such as TARP, GSE, FDIC). The YoY increases in the following areas are:

Education: $88B
Medicaid: $49B
Medicare: $42B
Social Security: $57B
Fed. Unemp. Insurance $75B

These YoY increases from '08 to '09 total $311B, or 2.2% of a $14T U.S. economy, this was probably the reason for any GDP growth over the subject period. One key for growth in our economy going forward into 2010 will be the size of any YoY increases in these same areas again this year.

Here is a snip of 1Q (thru Dec. 30th) FY2010 Withdrawals, with highlights of the same sub-lines.

Based on 1st quarter FY2010 (Dec. 30 DTS) totals, and projecting simply 4 times these quarterly Treasury spending rates, would result at year end in a FY09 to FY10 YoY increase of $80B, or 0.57% of a $14T GDP. The projected increases would be:

Education: $FLAT
Medicaid: $12B
Medicare: $17B
Social Security: $16B
Fed. Unemp. Insurance $35B (the largest.... thanks a lot!)

Treasury will have to accelerate spending in these areas for the remaining 3 quarters of FY2010 to have the same effect on growth as the previous year from these 5 large areas of Federal spending. If not, it will be up to the non-government sector to pick up the pace of growth to have a repeat in YoY growth in 2010.

FY2010 Notes: The COLA portion of Social Security payments will have NO increase in CY 2010, there was a 5.8% COLA in CY 2009, any YoY increase in Social Security will mostly be due to increase in enrollment. On the 1Q 2010 snip I've highlighted in blue the 1Q interest paid on Treasury Securities; at $35B per quarter, this rate may result in a full year reduction in interest paid to bond holders in FY 2010 (too bad savers!).


Unknown said...

Are you the same Mike Norman who made a fool of himself debating Peter Schiff that real estate was not a bubble?

The Joker said...

Matt, from what website did you get this data?

Matt Franko said...


Treasury website here:

See Dec 31 posting now for full 1Q 2010.