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Yesterday’s U.S. budget update has got a lot of investors thinking about the U.S.’s balance sheet issues. To recap, April’s contribution to fiscal 2010’s federal budget deficit was a staggering $82.69B – roughly 4x the April 2009 deficit of $20.91B. This most recent sign of the times is especially telling considering that there’s been a budgetary surplus in 43 of the past 56 Aprils (certainly a function of the April 15th income tax deadline). All told, this marks the 19th consecutive month of monthly deficits.

The U.S. must rollover 40% of its debt by 2012, which includes issuances of prior years as well as planned and unforeseen intra-year issuance. That number amounts to roughly $3.4 trillion dollars (including estimates) of refinancing needed over the next 2.5 years! In fact, according to Michael Pento of Delta Global Advisors, the U.S. Treasury auctioned $8.8T in debt during fiscal 2009 – more than 100% of all publicly traded debt! The chart below shows the Treasury maturity schedule from now through 2020. The budget deficit is added to give a sense of roughly the minimum amount of treasury issuance needed each year. These numbers are, of course subject to change based on treasury issuance in the coming years, but as of today, the U.S. public debt maturity schedule is outlined in the chart below.

We will be hosting an upcoming call on the fiscal future of the United States debt where we present our downside budget scenario, but for the time being keep this chart front and center as you think of whether the United States can keep her AAA rating longer term.

Darius Dale


U.S. Government Maturities . . . A Major Pain In the Balance Sheet - 1