First the good news: Elon Musk's DOGE is going through government spending with a fine-toothed comb, slashing a million here, a billion there.

The bad news: at the rate it is going, DOGE will need a few hundred years to make a tangible impact, because as the Treasury reported earlier today, in January the US government spent a near-record $642 billion, a 29% increase from the $500 billion in January...

... while it collected just $513.3 billion in tax revenues, a far more modest 7.5% increase YoY...

... which resulted in a $129 billion budget deficit for the month...

... the second highest January deficit on record (only the post-covid shock of 2021 was great)...

... and $840 billion so far in fiscal 2025.

This is a problem because as shown in the next chart, the cumulative budget deficit for the first 4 months of fiscal 2025 is the highest on record, surpassing even the fiscal shock from the depths of the post-covid response.

And the punchline is that no matter what Musk does, the USS Titanic is now more or less on autopilot because while a few billions in discretionary spending can be cut, interest on the debt can not be - without a default (it can however be inflated away... and it will be) - and in January, gross interest on the Federal debt hit a record $1.167 trillion in the past twelve months thanks to another $83.6 billion in interest spending.

Another way of looking at it: in the first four months of the fiscal year, the US has spent $392 billion on interest alone, the highest 4 month total ever.

What else to say? Well, we could lie to you and tell you that there is some hope and that DOGE will be able to fix this, but as much as we'd like that to be the case, we are now well beyond the Minsky Moment and for all the kicking and screaming, there is only one way all of this ends.