The latest data released by the USA Treasury Department on Wednesday showed that the government spent $584.2 billion in November (the second month of the 2025 fiscal year), an increase of 14% compared to the previous year, setting a record high for the same period.

From a 6-month moving average perspective, USA government spending reached $586 billion, nearly at a historical high, second only to the spending frenzy during the COVID-19 pandemic.

The spending surge is primarily due to increased expenditures on health, defense, and social security, with Medical Insurance spending soaring by $50 billion.

In contrast, the USA government's tax revenue only saw a modest increase of $301.8 billion, rising 9.8% from $274.8 billion in November last year. As shown in the chart below, the 6-month average of tax revenue remained at $380 billion, unchanged from three years ago.

Excluding the interference of Calendar effects, the financial deficit issue of the USA government is more severe. After deducting unusual surpluses, the fiscal deficit for the USA in October and November reached an astonishing $624.2 billion, skyrocketing 64% compared to the same period last year, setting a historical record for the first two months of the fiscal year's deficit (even including the frenzied spending during the COVID-19 pandemic).

In other words, from the perspective of the deficit, the budget deficit for the first two months of the 2025 fiscal year is the worst start to a new fiscal year on record for the USA Treasury Department.

Even more alarming details are that the Treasury's debt repayment costs rose again in November. Total interest payments amounted to $87 billion, an increase of $7 billion compared to $80 billion for the same period last year.

According to recent standards, interest expenditures in November still seem to be at a low level, but considering that most interest payments are concentrated in December, the interest expenditure for next month is expected to exceed 150 billion dollars.

Interest expenditures have become the second largest expenditure for the USA government, nearing 1.2 trillion dollars, and may continue to rise, especially in light of the Federal Reserve's premature end to its easing cycle due to a round of inflation triggered by rising prices.

The good news is that, for the moment, the surge in interest payments for the USA has been postponed. At the end of November, the weighted average interest rate on outstanding debt was 3.36%, approximately at a 15-year high, but slightly down from the previous month, marking the third consecutive month of decline.

However, do not expect the decline in interest expenditure rates to continue, as even though the Federal Reserve has cut rates twice since September, this has been offset by the surge in debt. The total debt in the USA has reached 36.2 trillion dollars, an increase of 5 trillion dollars from a month ago, and unless the government efficiency agency (DOGE) led by Musk manages to cut trillions in expenditures and interest in some manner, the USA's debt will only surge in the coming years, with interest expenditures soon becoming the largest single expenditure category for the USA government.

It is worth noting that most of the USA government's expenditures are concentrated in areas destined for political turmoil; in other words, any cuts may provoke resistance.

Editor/ping