Thanks to a large draw down in the federal government’s cash on hand and to the “extraordinary measures” that the Treasury is currently taking to avoid surpassing the legal limit on the federal debt, the federal deficit and the federal debt actually went in dramatically different directions in May.
In fact, the deficit went up $138.732 billion during the month, according to Treasury’s official accounting, while the debt went down $90.024 billion.
That means that even though the federal government spent $138.732 billion more in May than it took in through tax revenues, it was still able to decrease its outstanding debt by $90.024 billion during the month.
The result was a spread of about $228.756 billion between the increased deficit and the decreased debt. Where did the government get this $228.756 billion it needed not only to cover its $138.733 billion deficit for the month but also pay down a net $90.024 billion in debt?
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