Economy, Business, Finance News, Technology, Telecommunication, Smartphones, Tablet|Finance | Economy | Money | Financial Market | Stock Market | Central Banks | World Economy | World Finance | News Summary | News Aggregator | Handphones | Technology | Telecommunication | Internet | Broadband | Wifi | Wimax | Bluetooth | Smartphones | Tablets | Computers | PC | Netbook | Notebook

The United States dropped a record $220.9 billion further into the red in February, the Treasury Department reported Wednesday.

The shortfall was up from the previous record $193.9 billion shortfall in February last year.

It’s the 17th straight month that the U.S. government has posted deficits. The last time the government posted a monthly surplus was in September 2008, when the government reduced the deficit by $45.7 billion.

The cumulative deficit for fiscal 2010, which started in October, reached $651.6 billion, up from $589.8 billion in the same period the year before. The Obama administration is forecasting that the deficit will hit $1.56 trillion this year.

Spending increases overshadow revenue boost: Wednesday’s announcement came as little surprise to economists, who expected the deficit for February to total $222 billion, according to a consensus compiled by Briefing.com.

Receipts totaled $107.5 billion, up from $87 billion in February last year and outlays totaled $328.4 billion, up from $281 billion.

Despite the government’s record losses, the year-over-year boost in revenue during February is at least one hopeful sign that the economy is faring better, said Robert Bixby, executive director for the Concord Coalition, a federal budget watchdog group. It was the first time since April 2008 that the government posted higher revenue when comparing monthly data year-over-year.

The overall losses were most likely driven by the recession and tax refunds, said Nathan Topper, an associate economist with Moody’s Economy.com.

February is traditionally a big deficit month for the government, as Uncle Sam starts writing tax refund checks, he said. And because the recession dampens business profits and wages, refunds spike. There were $65 billion in tax refunds recorded in February this year, compared with $77 billion last year and an average of $49 billion for last decade, according to Moody’s Economy.com.

Spending up: The government shelled out $65 billion to Health and Human Services, $62 billion in Social Security expenses and $48.9 billion to the Department of Defense in February. Spending is up in all those departments for the first five months of the government’s fiscal year, over the same period last year.

Corporate income tax refunds were higher than usual because of legislation that allows them to apply current losses against prior profits to become eligle for refunds.

In February, the President Obama signed into a law a record $1.9 trillion increase to the government’s debt limit, bringing the new cap to about $14.3 trillion. To top of page

Related Posts:

• USA October month US$176 billion deficit

US economy hasn’t shown any sign of recovery.  The US Treasury Department reported on Thursday that federal coffers racked up a worse-than-expected deficit of $176.4 billion for the month.  It was the 13th straight month of a reported monthly deficit. Treasury said it was the largest October deficit on record.

October is the first month of the government’s fiscal year, and at this reading, the Treasury is estimating that the annual deficit will hit $1.5 trillion. That would top the $1.42 trillion registered for 2009, which was the highest annual deficit since 1945.

Interest paid on the debt in October was $22.8 billion – or 7% of federal outlays for the month.

For the month, the Treasury took in $135.3 billion from various sources and spent $311.7 billion.

The administration has promised to deliver a deficit-reduction plan along with the president’s proposed 2011 budget, which will be released early next year.

The call to reduce the deficit as soon as the economy regains its footing has grown louder in recent weeks as the country’s accumulated debt will once again pierce the congressionally imposed debt ceiling sometime by the end of the year. As a result, lawmakers will have to vote to increase it from its current level of $12.1 trillion.

In anticipation of that vote, a group of lawmakers have been pushing for a bipartisan commission to be created to make a lot of the hard choices lawmakers have thus far avoided: how to rein in spending on Medicare and Social Security; how high to raise taxes on everyone, not just those making $250,000 or more; and which government funded programs to cut in part or altogether.

The person charged with drafting President Obama’s deficit-reduction plan is White House Budget Director Peter Orszag.

Orszag told CNN on Thursday that the current deficit, as bad as it is, “is actually, ironically, helping the economy. The tax relief and additional spending helps to bolster demand when the economy is very weak.”

But, he noted, by 2011, 2012 or 2013, too large a deficit will harm the economy by crowding out private investment. “We need to get ahead of that problem,” Orszag said.

Related Posts:

• Japan Outlook : Output Down, Jobless Up
• China’s economy grows by 11.9% for the first quarter
• Highest US monthly deficit : US$221 billion
• US Fed struggles to bolster economy
• Malaysian Economy may contract by1.19% in 2009