Federal Deficit per Capita

Think of it this way

It is what the household charges to the credit card each month.

What is Federal Deficit per Capita?

The difference between what is spent and what is collected, per person and as an annual average. It is the gap in the chart above turned into a single figure.

How to read Federal Deficit per Capita

Above zero there is a deficit. Below zero there is a surplus, and in this history there is only one such stretch: fifty-two consecutive months, from November 1997 to March 2002.

What Federal Deficit per Capita means for the market

It is the volume of new debt the market has to absorb each month, expressed per person. Multiply it by the population and you have net issuance.

Where the money flows

Money leaves the Treasury toward people —payrolls, pensions, healthcare, interest— and returns through taxes. This series divides those two streams by the number of inhabitants so they can be compared with a salary. What taxes do not cover is covered by issuing debt, so the gap between the two lines is exactly what the Treasury has to place on the market each month.

What to watch in Federal Deficit per Capita

The fact that it does not fall even during expansions is what makes it structural. The 1997-2002 exception is instructive because of what it took: spending caps, tax increases, the post-Cold War defense cuts and a stock market bubble that sent revenue soaring, all at the same time. When the bubble burst, the deficit returned within two years.

It is the extra amount the fiscal circuit injects each month. Note: the issuance that finances it drains almost the same amount, so the net effect is close to zero.