AP Blows The Deficit Reporting, Part II: The Invisible April Receipts Dive
In Part I (at NewsBusters; at BizzyBlog) of my coverage of Martin Crutsinger's Associated Press report about Uncle Sam's Monthly Treasury Statement and the Obama administration's deficit projections, I noted that the government "miraculously" shrunk the deficit through March, the first six months of its fiscal year, by $175 billion, by employing an "accounting change."
Even though this "accounting change," which does not report TARP disbursements as outlays because they are considered "investments," violates fundamental cash-flow reporting principles, Crutsinger gave the change an unskeptical treatment. He also failed to tell readers whether the administration used the old or new method in calculating its latest full-year deficit projection of $1.84 trillion. If Team Obama used the new method to determine it, the deficit under the old and more correct method will more than likely be over $2 trillion.
Crutsinger also failed to report the steep dive in federal receipts that took place in April, which is the government's highest month for collections, compared to last year's all-time record April haul, which I referred to as the "Supply-Side Stunner," and which Crutsinger and others also failed to report when it occurred last year (at NewsBusters; at BizzyBlog).
Here is how April 2009 collections compared to April of 2008:
Here is all Crutsinger had to say about federal receipts in his report:
The government normally runs surpluses in April as Treasury's coffers swell with people paying their annual tax bills by the April 15 deadline. But the deficit is being driven higher by the billions of dollars being spent to rescue the financial system from its worst crisis since the 1930s and deal with the worst recession in decades.
The recession also has boosted government outlays for benefit programs like unemployment insurance and food stamps while slashing tax revenues.
..... Through the first seven months of this budget year, the government has collected $1.26 trillion in receipts, a drop of 18.9 percent from a year ago.
That's it. He was right there, and refused to tell us how much April's drop was.
By doing so, Crutsinger conveniently ignored the bigger receipts story. Here is how collections during the first seven months of fiscal 2009 compare to fiscal 2008:
It is at least as important for readers to know that April continued a steady and alarming downward trend in receipts that actually begin a bit less than a year ago as it is for them to know the fiscal year's overall result thus far.
April is supposed to be a strong month for receipts not only because of April 15 payments, but also because the first quarterly installment for individuals who pay estimated taxes is due on April 15 -- something Crutsinger "somehow" forgot to tell his readers. Those who make estimated payments are largely the self-employed and those who are required to report income from partnerships and corporations on their individual returns. Receipts from those individuals are on the third and fourth line items in the first chart above.
As you can see, they're drying up, as are collections from corporations, by far more than one would expect as a result of the 3.3% non-annualized contraction that has occurred during the past three quarters.
I attribute at least part of the decline to the much-discussed "going Galt" phenomenon, which really began last summer, as businesspeople, investors, and entrepreneurs began discerning the true nature of the administration that was the media favorite to gain power. "Going Galt" is yet another very real development that Crutsinger and the establishment media refuse to acknowledge.
Cross-posted at BizzyBlog.com.