Market Commentary

U.S. November Budget

Income and outgo at the Federal level at times can be very enlightening. In November the short fall was $139 billion dollars, and that was up 1% from a year ago. Spending rose 3% and revenue rose 4%. Also, income tax withholdings rose 6%.

So the government is getting more money from peoples’ payroll.  Spending rose much higher than inflation at 3%, and the only reason it went down was because overall revenue rose, and we are still short for the month by $139 billion dollars. Since this has been happening for years, as we have recovered from a deep recession and are now growing fairly well, it does not matter how much money comes into the government coffers it will never be enough.

For investors the disturbing part is it is not enough money to keep government open as the threat of a shutdown seems to linger. The next closer date is December 22nd. Have you noticed that a few years ago this would be a panic situation for investors and today it is routine? Well at least until it is not routine if the politicians do not come to a last minute agreement again.  

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