Today brought refreshing news from the federal government: The U.S. Treasury Department reported a monthly surplus for the first time since September 2008! In April, the government brought in $59 billion more tax receipts than spending expenses.
At this point, the government appears to be getting its act together in trying to avoid another deficit ceiling circus. Well, at least until after the November election that is. The fact remains that even with April’s surplus, the federal government is headed towards a $1.33 trillion deficit for fiscal 2012, which closes at the end of September.
Earlier this month, the Treasury Department also reported that the federal government’s budget deficit declined 6% to $779 billion for the first six months of fiscal 2012. The lower-than-anticipated budget deficit means that the U.S. government may not run out of money until just after the November Presidential election. It still won’t be an enjoyable time to be a politician, but at least they’ll be able to focus on being positive for the election before gearing up for the next fight.
The fact of the matter is that this is the time for politicians to be positive. As we draw closer to the November election, our final two candidates will be running around trying to convince voters that as President, each would get a handle on the Federal deficit as well as the larger economy. And, such behavior tends to get consumers, businesses and investors in the buying mood. In fact, in 1980, the S&P rallied 25.8% thanks to bullish sentiment related to the election.
So, I’ll welcome news like this. I’ll continue to monitor how the election is going as we draw closer to November. In the meantime, enjoy the ride!