With “base effect” all the rage this month, moments ago we also got the 1-year anniversary of the Covid crash in the US budget deficit dataset when the Treasury reported the April government revenue and spending. And while the data in isolation wasn’t pretty, it was absolutely stellar compared to last April’s blowout $738 billion deficit.
Last month, the US collected $439.2BN in receipts, a solid improvement to the $267.6BN in March and 81.6% higher than the $241.9BN in receipts collected last April when the US economy was in freefall. Of note: $7.2BN of the money collected by the Treasury included $7.2BN in Fed remittances from “profits” on the Fed’s QE.
Outlays, while ugly at $664.8BN, were also an improvement compared to the $927.2BN the US spent in March when it funded the latest Biden fiscal stimulus, and down 32.2% from the $979.9BN last April when the Trump admin unleashed the first stimulus.
The resulting April deficit was “only” $225.6 billion, which while still staggeringly high, was a fraction of the near record $738BN deficit recorded a year ago.
Yet despite the modest relative improvement in April, on a year-to-date basis the picture has never been uglier: in the seven months through April for Fiscal 2021, the Treasury collected $2.14 trillion in receipts while spending 90% more, or $4.075 trillion.
As a result, seven months into the fiscal year, the YTD deficit stood at a record $1.932 trillion compared to $1.481 trillion, although whether 2021 overtakes 2020 depends on if and when Biden will pass his next (of many) stimulus programs.