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Just a quick post to record the finals…more detailed analysis to come… The April 2013 Cash Surplus rings in at $117B compared to a $59B surplus in April 2012. The main story all month was revenues…up $87B…a 26% increase. Taxes withheld were up 10% as expected, but corporate tax receipts were up 27% and tax deposits not withheld were up a whopping 40%…or $56B. The revenue increases were somewhat offset by a $29B increase in outlays primarily related to timing.
So what does it all mean? Are we saved? Should we stop worrying about the deficit? Absolutely not. While it shouldn’t be dismissed, in the big picture, this is one month, and one $58B improvement…compared to an annual deficit still likely to be north of $850B, and debt outstanding of $16.8B. Give me two straight years of 26% growth and I’ll be forced to re-evaluate my central thesis. For now, it’s time to appreciate an admittedly impressive month, then sit back and see how the rest of the quarter turns out.
If you haven’t seen it yet, the WSJ put out:
“The Treasury Department said that it expects to retire a net $35 billion in bonds, notes and bills from April to the end of June.”
Yawn…. It is technically true though. Strong April surpluses will likely be large enough to pull the quarter positive deficit wise, and with $152B cash… in the short run, Treasury can play whatever games they want with the debt. They could pay down the debt $152B today…then re-issue the $152 tomorrow….would it make a difference in anything? No!! All I am saying is that for anyone who understands the deficit and the monthly fluctuations,this is really a nonevent.
We get our final April 2013 DTS today, and when all is said and done, April 2013 will no doubt go down as one hell of a month with YOY revenues surging 20-25%…handily beating my forecast of about 12% growth. However…it is yet to be seen whether this blowout is a turning point, or a last hurrah. I’ll be keeping a very close eye on May-June revenues…if we fall back under 10% YOY growth, it will be a pretty clear indicator that April was just a blip. If, on the other hand we see sustained growth in the 15% range, it very well could be a sign that the trend really is shifting.