EconomistMom.com

On the Concord Coalition’s “Tabulation” blog, we note that the federal government ran a deficit (of $20.9 billion) in April, which is actually a highly unusual fiscal circumstance.  It’s not the deficit that’s unusual, it’s the April deficit that’s unusual.  See, we usually get a surge in revenue in April because most people who owe taxes beyond what’s been withheld from their paychecks like to wait until April 15th to pay them.  And revenues usually grow from year to year as the economy grows.

So two things worked against us this April in terms of the April deficit:  (i) the economy is shrinking, not growing, and hence revenues have been falling, with the downward trend steep enough to more than offset the April 15th effect; and at the same time (ii) federal spending this April is dramatically higher than April spending usually is (17.5% higher than last April).

In fact, an April federal budget deficit is so unusual that the last time it happened was in 1983–the very spring I graduated from college.  Which reminded me that our commencement speaker at my U. of Michigan graduation that spring was no other than Lee Iacocca, the CEO of Chrysler who had brought the automaker from the brink of bankruptcy in 1979 (when I started at U of M) back to profitability, with the help of a federal loan which Chrysler ended up paying off early, in 1983.  Maybe everything’s cyclical and somehow these cycles move together?…