WASHINGTON (AP) — The U.S. budget deficit totaled $356.4 billion in the first two months of the budget year, down 17% from the same period a year ago as a sharp jump in government revenues offset a smaller increase in spending.
In its monthly budget report, the Treasury Department said Friday that the government’s deficit in October and November was $72.9 billion below the deficit in the same two months last year. The government’s budget year starts on Oct. 1.
The improvement reflected the fact that government revenues have been rising at a faster pace than government spending over the past two months.
For the October-November period, tax revenues totaled $565.1 billion, a sharp 23.6% above revenues in the same period last year and a record for the first two months of the budget year.
The big increase reflected an improving economy that has seen corporate profits rise and millions of people going back to work, which boosts individual tax payments. In addition, the revenue increase reflected the fact that businesses are having to make up for their portion of Social Security tax payments which were deferred last year as part of the tax relief Congress granted during the pandemic-triggered recession.
Government spending totaled $921.5 billion, also a record for the first two months of the budget year, and 3.9% higher than the same two months last year.
The budget deficit totaled $2.77 trillion for the 2021 budget year that ended Sept. 30. That was the second highest annual deficit on record, exceeded only by the $3.13 trillion deficit for 2020.
The deficits for both years were inflated by the trillions of dollars in government spending approved by Congress to keep the country from sliding into a deeper downturn because of the COVID shutdowns.
The Congressional Budget Office is forecasting that the deficit for the current 2022 budget year will narrow further to $1.2 trillion. CBO projects the annual deficits will remain below $1 trillion until 2026 when they will once again top the $1 trillion mark.
For the month of November, the Treasury report said the deficit totaled $191.3 billion, a record for the month of November.
As if investing in the tech sector did not carry enough risk, there’s a new threat to the tech part of your portfolio. There is a growing sense that the United States Congress will seek to regulate some of the largest tech companies.
At this point, it looks like several of the FAANG stocks (Facebook, Amazon, Apple, Netflix, and Alphabet/Google) may be the initial targets. Some regulation, particularly regarding data security and privacy – not to mention censorship – would be welcome. But we all know it’s not likely to stop there.
What will more extreme regulation look like? If the most vocal members of Congress hold sway, some of these companies may get broken up or face utility-like regulation. From an investment standpoint, it just adds uncertainty.
The good news is that the tech sector encompasses many companies that are likely to avoid government regulation. With areas like cybersecurity, support for remote work, and mobile gaming to continue to pick up steam, there are other areas that can help boost your portfolio.
And in this special presentation, we’ll give you seven of our picks for tech stocks that will avoid government regulation.