Almost a year ago, I was posting on what I called the "Supply-Side Stunner" (at NewsBusters; at BizzyBlog).
In April 2008, the US Treasury collected an all-time record $407.3 billion ($403.75 billion after subtracting the first $3.35 billion wave of stimulus checks, which really should have been treated as outlays, that went out just before month-end). It was an indication that, as I said at the time, "many (entrepreneurs, businesspeople, and investors) are thinking, in the face of relentless media harping to the contrary, that 2008 will be at least as profitable (as 2007)."
This year, it's shaping up to be the "Bailout Year Bummer." Uncle Sam's fiscal year began on October 1 of last year, mere days before Congress passed the legislation that has come to be known as TARP, and a bit more than three months after Nancy Pelosi, Barack Obama, and Harry Reid promised to starve the economy of energy and punitively tax its highest producers, creating what I have since called the POR (Pelosi-Obama-Reid) Economy.
Through March, federal receipts were running 14% behind the previous year. Each month during the fiscal year has trailed the previous year, and degree of the difference has steadily increased.
Now look at what we're facing in April:
My estimate of April's final result is almost 40% lower than April 2008, and further ratchets down the trend of collections decay that goes back to last summer. The receipts shortfall is far more than one would expect from an economy that shrank only 1.74% in the final half of last year (without annualization, the economy shrank 0.125% in the third quarter, and 1.614% in the fourth). It is also probably far greater than the White House and the Congressional Budget Office are anticipating.
Here is where things stand as of the April 21 Daily Treasury Statement, which was just released at 4:00 p.m. today, and how it compares to April 22 of last year (a Tuesday-to-Tuesday comparison during a month is more meaningful in the context of how cash comes in within different categories):
It would appear that getting to $250 billion by month-end might be a stretch.
So when does the receipts crater become news?
Cross-posted at BizzyBlog.com.
—Tom Blumer is president of a training and development company in Mason, Ohio, and is a contributing editor to NewsBusters
Editor at Large
Comments Policy
It would appear that
April 22, 2009 - 16:23 ET by Dan The Man 2It would appear that getting to $250 billion by month-end might be a stretch
Well obviously it is the tax breaks Obama was forced into giving. And the answer is to raise taxes. We also obviously have to raise them on everyone but the rich (those with jobs) will be the hardest hit and rightfully so.
I can see it now our Fearless leader saying something like this "Comrades, we have come to a point in our nations welfare where we can no longer allow some of us to siphon off needed funds for our hegemony and glorious regime. (In the distance and close up we hear the roar of approval) We are forced for the welfare of all to raise the taxes for a time. We ask all to sacrifice and be patriotic at this time.
Our government has formed a cadre of "volunteers" to go door to door and collect these taxes. They will be in government issue uniforms and vehicles, please cooperate fully with them. Thank you and praise allah.
Nuke em til they glow then shoot em in the dark.
Just you wait
April 22, 2009 - 17:08 ET by bre1227We should now all prepare ourselves for the infamous IRS "lifestyle" audits begun a few years ago. Perhaps, Rush can give us some pointers?
When?
April 22, 2009 - 17:29 ET by CaringwhiteguyThis receipts crater becomes news when Obama and the Congress tell us the only way to cover the shortfall is to raise taxes.
Tom, it seems as if the
April 22, 2009 - 17:54 ET by d1carterTom, it seems as if the Geitner Deduction has spread amongst the taxpayer electorate....?
RE: The Geitner Deduction
April 22, 2009 - 23:38 ET by Andantehttp://www.youtube.com/watch?v=MAdJLLmpWBU&feature=channel_page
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"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."
Thomas Jefferson
Wealth Taxes
April 22, 2009 - 18:05 ET by slickwillie2001I expect this to get much worse than anything imagined. I expect a bank account tax within a couple of years; a certain percentage of all private bank accounts, money market accounts, credit union, etc, will become the government's money once a year. All stock and bond holdings will be priced to market once a year, and the government will own a percentage of them.
The liberals have been very successful at taxing all forms of income, but they chafe at the thought of all that wealth sitting out there untaxed. They will find a way to get at it.
tax receipts
April 22, 2009 - 19:38 ET by clhThis is the big story and our math challenged graduates of journalism schools will not understand it. It should be something every investor tracks. No money = no programs, more inflation or more taxes.
The political "debate" and grandstanding is over "fairness" and marginal tax rates ignores the real question of "What is good tax policy?"
King Barack the Mild can rant, rave and cajole about fairness all he wants but he is reaping the rewards of awful tax policy. He can either shoot the messenger and threaten the peons or he can pursue a good tax policy - one which seeks to maximize economic growth with the side effect of rising tax revenue.
The second downer for the King and his Court will be the productivity numbers which will show a similar collapse. If I get a government job digging holes, I am grateful for the money the government gives me (I will probably vote to keep the job while complaining endlessly about what a crappy job it is.) Meanwhile, while we will have some hole diggers and a quarter millionpaid "volunteers" roaming our neighborhoods and telling us to double glaze our windows, productivity will disappear. The by-product will be more inflation pressure.
A burnt goose with an aroma of marijuana
April 22, 2009 - 22:20 ET by needleI suspect Obama is cooking his own goose:
To say that his present and projected deficits have already moved into politically dangerous territory is a big understatement.
He and his buddies in Congress have already committed to, and legislated, huge stimulus, budgets and bailouts.
He has to do something, and something significant, to offset his spending, which means TAXES; and as the tax receipt numbers are showing, the present tax structure is not only failing to being in more money, it is bring in MUCH LESS money because of a multiplier effect built into a tax policy predicated on a successfully growing economy and commensurate capital gains.
Result: an deficit that is even bigger than massive record-breaking huge.
How about new confiscatory taxes. POLITICALLY DANGEROUS
The one best option for Obama is to radically rein in and reduce spending commitments already made in the last three months. [Now put you coffee mug down, and swallow what is presently in your mouth.] Obama in fact has already started this process: he has promised a $100 million cut back!!!
It will be harder for Obama to reducing spend than it will be for a marijuana smoker to give up his habit.
Impunitas semper ad deteriora invitat.
tax receipts
April 22, 2009 - 19:38 ET by clhThis is the big story and our math challenged graduates of journalism schools will not understand it. It should be something every investor tracks. No money = no programs, more inflation or more taxes.
The political "debate" and grandstanding is over "fairness" and marginal tax rates ignores the real question of "What is good tax policy?"
King Barack the Mild can rant, rave and cajole about fairness all he wants but he is reaping the rewards of awful tax policy. He can either shoot the messenger and threaten the peons or he can pursue a good tax policy - one which seeks to maximize economic growth with the side effect of rising tax revenue.
The second downer for the King and his Court will be the productivity numbers which will show a similar collapse. If I get a government job digging holes, I am grateful for the money the government gives me (I will probably vote to keep the job while complaining endlessly about what a crappy job it is.) Meanwhile, while we will have some hole diggers and a quarter millionpaid "volunteers" roaming our neighborhoods and telling us to double glaze our windows, productivity will disappear. The by-product will be more inflation pressure.
The reason this is not news
April 22, 2009 - 20:34 ET by TheHistorianI remember in 2001-2003, the monthly "deficit" was reported religiously. The reason it is not now reported is because all of the newspapers have cut back on their use of paper. They can only publish important news about Camel Lot II (spelling deliberate) which relate to the type of dog which Obama is getting for the girls. And naming it for himself (Bo) when the dog already had a name. And buying from a breeder when a Portugese water dog was already available in a Northern VA shelter. http://www.foxnews.c...
"What experience and history teach is
this - that people and governments never have learned anything from history,
or acted on principles deduced from it."
G. W. F. Hegel
what?? This should be the
April 22, 2009 - 23:34 ET by GeronLwhat?? This should be the biggest news ever. This also means that our deficit is going to be bigger than anyone in the media has said.
Oh dear. I thought it was just me.
April 22, 2009 - 23:58 ET by JWFI saw the writing on the wall. The country is going to elect a socialist that will institue socialist programs and they are going to want me, the guy that has been paying taxes his whole life, to pay for it.
I said no.
I am not spending money on anything but what we desperately need. Why reward the democrats with a recovering economy.
I am paying down my debts. Since I know the typical democrat answer is to raise my taxes. I will need money later when my taxes are raised.
I moved the brokerage account (emergency funds) into our ira's. Why give the democrats another source of income.
I am putting less money into the 401k. Why reward democrats with a recovering bull market.
Is everyone else feeling the same way? I have said it before and I will say it again. We are not a socialist country yet. The rich are free to leave. Maybe they are feeling the same way. Get out while the getting is good.
Sincerely,
a Veteran of a 1000 psychic wars.
Rocket Science
April 23, 2009 - 09:26 ET by Meredith1966It seems to me that in light of our Guvment's taking in less revenue that perhaps they should respond accordingly, as any of us would in the face of less income, by CUTTING SPENDING. When your receipts go down, you don't buy a Hummer, you buy an Escape or, better yet, you save your pennies. Only in Government World do they respond to less income by spending more. Bass Ackwards, you know?
"The words of a President have an enormous weight and ought not to be used indiscriminately." - Calvin Coolidge