Deficit in first three months of fiscal year up $50 bln over last year

The Treasury just released the budget statement for December and it shows that for the first three months of the current fiscal year (2010) the deficit was $388.5 bln compared to $332.5 bln for FY 2009. Increased deficit spending has been supporting output and that's why the economic data and the stock market have been moving higher.

It's doubtful that this will continue, however, as Obama has promised to cut the deficit this year and the deficit has become a major political issue.