U.S. Deficit Growing–Not Tax Receipts
Monday’s post closed with, “. . . The nonpartisan agency projected the government will run a deficit of $229 billion in February, the highest monthly figure ever.” (Click here for the complete report from the Washington Times.) That means the government spent nearly $8 billion more than it took in each and every day of last month (29 days). This is not a sign of economic “strength” but of tremendous weakness. You cannot print your way to prosperity, but it can pave the way to an economic collapse.” (Click here for Monday’s complete post.) The $229 billion (February) deficit was reportedly revised upward, making the situation worse than I reported. Tax receipts are, also, not keeping up with the monthly deficits. You cannot grow the deficit to infinity. This is totally unsustainable, and the only question is when will the game be over? Please keepin mind, the real annual U.S. budget deficit is really near $5 trillion (using GAAP) not the $1.3 trillion reported by the MSM. This according to a recent Shadowstats.com report. Zerohedge.com had a good piece yesterday to explain the terrible news. It said, “A few days ago we noted that based on preliminary data, the February budget deficit would hit $229 billion (yes, nearly one quarter of a trillion in one month, about where real Greek GDP is these days) – the largest single monthly deficit in history. Unfortunately, this number was low: the final February deficit was just released and the actual print is $231.7 billion. It also means that in the first 5 months of the fiscal year, the US has raked up $580 billion in deficits, oddly matched by $727 billion in new debt issuance, 25% more new debt issued than needed to fund deficits… And that in itself would not be horrible – February is traditionally the worst month for deficits as the Treasury sees a surge in tax refund issuance – if it wasn’t for something even more troubling. As the second chart below shows, through last Friday, and net of tax refunds, total US tax revenues were actually lower in the fiscal 2012 year to date period than compared to 2011, by just under $2 billion, at $625.5 billion. Which is the weakest link for any argument that the US is actually growing:” (Click here to read the complete Zerohedge.com post and see the charts that give an ugly picture of the rising U.S. deficit.) –Greg Hunter–
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About the Author
Greg Hunter
Greg is the producer and creator of USAWatchdog.com. The site’s slogan is “analyzing the news to give you a clear picture of what’s really going on.” The site will keep an eye on the government, your financial interests and cut through the media spin. USAWatchdog.com is neither Democrat nor Republican, Liberal or Conservative. Before creating and producing the site, Greg spent nearly 9 years as a network and investigative correspondent. He worked for ABC News and Good Morning America for nearly 6 years. Most recently, Greg worked for CNN for shows such as Paula Zahn Now, American Morning and various CNN business shows.
GAAP = generally accepted accounting practices. Like a household or business is required to use. As opposed to “cooking” the books like the government does
Hi Greg,
HOT tip: kindly check out this blog compilation titled: 320 RESIGNATIONS FROM WORLD BANKS, INVESTMENT HOUSES, MONEY FUNDS at http://americankabuki.blogspot.com/p/131-resignations-from-world-banks.html
Quote from the author: “I first began tracking this phenomenon just a few weeks ago when I found a blog talking about the 81 top-level resignations that had happened in a matter of just a few months. The thing that struck me then was that 12 of those resignations had happened in the day I found that article. So it seemed to me this was a growing phenomenon. I began to write a blog post …A few days passed and the number swelled to 155 resignations! Again life got in the way for me and now that I am sitting here to FINALLY make this blog posting… the number is up to 254 resignations! This is just 15 days since it was 81!”
Perhaps you would look into this and write about it since there’s definitely a story here.
Thanks!
🙂 Diane
Good stuff Diane, thank you!
Greg
Tax receipts not growning. No problem komrade. Just raise tax rates.
And the political cartoon was spot on
Hi Greg,
My husband told me an interesting “factoid” yesterday that he recently heard: 49% of U.S. citizens pay taxes…only 49%! I count myself and my husband two among the 49%-ers. He heard that a large majority of our population now relies on government support to sustain them.
I kind of already knew about this tax imbalance; corporations such as GE (and the like) getting away with paying NO taxes!
We are really in trouble. Sad. Never thought I’d see this happen in my lifetime.
I saw a new reality show called “Doomsday Preppers” (on NatGeo).
Samanth,
It is all catching up with us now. No more talk of the kids and grand kids. That’s 80’s and 90′ talk. What’s coming is for the here and now and getting worse by the month as all those boomers retire.
Greg
samantha,
you may want to inform your husband that since apprx. two thirds of the population is either children or retired, that number (49%) is about right.
now, if you are counting (and you must be to make your argument stand) that those on social security are relying on the government to support them, then you are falling for a huge bald faced lie. social security is a self contained program whereby money to fund it is paid in by those who eventually qualify to take it out. while social security checkoffs from you paycheck are often referred to as taxes, they are, in reality, no more a tax than a checkoff for a 401k.
social security is a retirement program paid for soley by those who work and paid to those who paid into it.
another popular misnomer that has been going around is that the social security system is broke. hardly. the ss reserve, as we speak, is at an all time high of apprx. 2.6 trillion bucks. this is enough to last for apprx. the next 25 years at the current rate of payoout. and the current rate of payout is at an all time high, of course, because of all the retiring baby boomers. and alot of folks are misdirected from the fact that this is ok because those same boomers paid in the (by far) biggest share to date.
as for that 25 year reserve life, most boomers will be gone in 25 years reducing the payout to reflect those (again) who actuall paid in.
yes, our esteemed government has robbed the pool on several occasions, but they have not come close to killing it. and of course they should be made to pay it back.
here is an excellent recent article from saturday evening post that lays it out quite concisely.
http://www.saturdayeveningpost.com/2012/02/28/in-the-magazine/trends-and-opinions/social-security.html
I wouldn’t get too excited about that ss reserve of 2.9T….although it looks good on paper it’s really nothing more than a big promissory note from a bankrupt entity (fedgov) that already owes at least 50 Trillion or more in unfunded liabilities that’s virtually unpayable. Add in trillions more from QE funding that’s been used to keep our economy ( & the EU )on life support for the last 2-3 years it should be obvious even to a mainstream news mag we’re in for a world of hurt.
Ayn Rand said…’you can ignore reality, but you can’t ignore the consequences of ignoring reality’. We’ve ignored reality for long enough….now it’s time to deal with the consequences.
Thanks, G. Johnson. Yes, my husband knows that 2/3 of the population are retirees and/or children. He was talking about working-age folks and those who refuse to work because government support is too good for them (example: people who keep having children with no viable means of supporting them and then the taxpayers end up footing the bills). He/I are not referring to people who NEED assistance: truly disabled, elderly, sick, etc.; as a society, we have to help those who cannot help themselves. And, as I pointed out earlier, the corrupt corporations who maneuver their monies off-shore in order to avoid paying their fare share of taxes in this country. There is something wrong with the tax system!
As a back up to my point:
Example: I know someone who has two children. Both fathers are, essentially, deadbeat dads…never paid an ounce of support, alcoholics/drugs…you get the picture. She has been on state aid (Maine) ever since her youngest was born (he is now in his early 20s). She had a second child just as the first one was getting ready to graduate high school (she was 40 at the time). She is now on “round two” of getting state aid. She recently got a new job where health insurance is offered and I said, “That’s great! Now you can get yourself and your son on the company’s health insurance policy.” She said…”Why would I want to do that? I can get it from the state for free!”
In talking about governmenet support, my husband was not referring to Social Security, which has been a very good social program. Thanks for the link to the article; I have printed out to read (I should have more carefully phrased my comment before posting).
I like Ron Paul, but I totally disagree with him on his views of Social Security.
Its probably 49% of the working population. Either way 95% of all statistics are wrong.
Hi Greg,
Spot on reporting!
The awfull truth is it is to late. Greece, Spain, all of Europe is just about done as far a the economy goes. I believe that the only reason that the U.S. has not gone over the edge yet is the upcoming election. Afterall, Obama has to look as good as possible.
What is really a concern will start happening about a year from now when Obama is back as President and he suspends the Constitution. The U.N will send in troops to back him up and we will be in deep do do.
Since we are following the Marxist model, I hope the elitists and so call academics, and the media will go the same way as they did in Russia. Then maybe “We the People” can get something accomplished.
What is amazing is how fast Obama has been able to pull this off. The congress has been his biggest supporter and helped him implement our downfall in less than 4 years. Even the Russians have 5-year planning periods.
Thank you Chuck,
It is too late for them but there is still time to put you and your family in a better position. Thank you for your comment and support!
Greg
@ Diane and Greg, are we at 257? after the announcement of Greg Smith Goldman CEO resignation? seems this is PR stunt/damage control/more than just a coincidence, all wrapped in one.
Also, Note: Jake Siewert will assume the interim Goldman post. the revolving door continues. This guy is a communication/PR guy, who along with being VP of ‘public strategy’ at Alcoa was also advising Geithner and had a two-time brief press sec positions for Clinton and Obama. Also, goldman gets White house council, Greg Craig. Craig was a legal advisor in the white house during the SEC goldman Civil case, and is currently in the Skadden Law firm that has represented Goldman for a long, long time.
the revolving door continues and most of my friends think this is a sign the Obama Admin is getting tough on Wall St…(sigh)
Thank you Christopher for the comment and analysis.
Greg