September was not a terrible month for the US budget deficit; well it wasn't great either, but at just a deficit of $27 billion in the last month of fiscal 2026, at a time when the US traditionally burns through 9 cash digits every month, it was relatively forgettable.
One can't say the same thing for October - the first month of fiscal 2027 - when all hell fiscal broke loose.
Let's start at the top: at 2pm today the US Treasury published the latest, October, monthly budget deficit data, which was also the first month of fiscal 2026.
It was, in a word, a shitshow. Total US receipts for the month were $369 billion, a blistering 8.8% drop from the $404 billion a year ago, with individual income taxes accounting for just $186 billion, or about half of the total, and the bulk of the balance coming from Social Insurance and Retirement receipts of $131 billion.
What was especially concerning, is that government receipts have tumbled from a double digit growth pace for much of the post-covid period to just 1.1% on a trailing 12 month YoY basis. This matters because virtually every time TTM spending has turned negative, the US was already in or about to enter a recession.
If receipts (i.e., taxes) were bad, then spending was an absolute debacle. In October, total outlays were $773 billion, a 12% deterioration from the $688.7 billion spent a year ago. On a trail
