Tag

Daily Treasury Statement

Dec 07
0

Daily US Deficit For 12/05/2012

By | Daily Deficit
The Daily surplus for 12/5 was $2.3B, bringing the deficit through 5 days down to $21.3B.

Compared to the prior two years, we look to be overperforming, posting a deficit 34B under where we were last December through 5 days. Some of this is due to some early December payments getting pulled into 11/30…which posted a single day deficit of $38.4B. The rest I suspect is just timing. It usually takes a week or two before the monthly and daily timing issues shake out and become noise. Looking ahead, I think we’ll have a much better idea how December is going to shake out after 12/17…which I believe is when we will get a glimpse at quarterly corporate income taxes. This would have been on the 15th, but since this year the 15th is on Saturday… we’ll probably see a spike of payments 12/17. Last year, the 12/15 cash in from corporate taxes was almost $41B…I wonder how 2012 will compare?
Dec 06
0

About That Revenue Problem

By | Fiscal Cliff

Through 11 months, 2012 is set to become the “best” revenue year ever….despite the payroll tax cut, the AMT patch, Doc Fix, the “Bush” tax cuts ect…. Who would have known? Nobody wants to tell the truth, so I’ll take a swing at it. The truth is that our economy has become dependent on government deficit spending to the tune of about 1.1T per year. Nobody thinks this is sustainable, but everybody thinks that if we take it away….great depression 2….and nobody wants to get pinned with that one when the history books are written. Fixing the problem today means instant depression…fixing it later means an even worse depression at some unknown date in the future. Rock…meet hard place.
Dec 04
0

Daily US Deficit For 11/30/2012

By | Daily Deficit
The US Daily Deficit for 11/30/2012 was $38.4B, bringing the November deficit through 29 days to $188B, $46B higher than the November 2011 deficit of $142B on slightly lower revenues and a $40B increase in cost.

 

Dec 01
0

Daily US Deficit For 11/29/2012

By | Daily Deficit

The US Daily Deficit for 11/29/2012 was $6.1B, bringing the November deficit through 29 days to $149B.  Assuming $25B of SSI payments go out today (11-30) we could easily end the month between $175B and $185B compared to last November’s $142B

 

 

Nov 29
0

Are Intragovernmental Holdings(Internal Debt) Real Debt???

By | Debt Limit
 As of 11/28/2012, 4.8T of the 16.3T of debt outstanding was classified as “IntragovernmentalHoldings”…a full 30%. It is my opinion that this is pure silliness. In reality, the internal debt is just an up to date tab of money that has been stolen and spent….primarily related to Social Security and government/military retirement funds. Here is an example. Let’s say that in a given month, the government collects $100B in Social Security taxes deducted from paychecks. If in that same month they pay out only $50B for Social Security benefits, the $50B balance is used by the general fund, and they pencil in a $50B liability on the federal balance sheet. An I.O.U. if you will…to ourselves. So the question becomes….can you really owe yourself money? I think not….here is another example.
Let us suppose that a bright young 22 year old with a University of Phoenix degree (and $50k of student loan debt) decides to employ a similar retirement strategy. Out of each paycheck, he sets aside 10% for his retirement….but them promptly spends it on pizza and beer. But not to worry…this bright young graduate diligently records these liabilities on his personal ledger as both an asset, and a liability. 45 years later, he reaches retirement with well over $1M “saved” He then goes on to enjoying his dream retirement right??? Of course not….because the very notion of owing yourself money is slightly moronic…. And yet here we are. The answer is NO!!
So what does this mean? Should we all breath a sigh of relief and simply write off 30% of the debt on our books. No on the relief…yes on the write off. The truth is…the internal debt has never really mattered, so  admitting to ourselves what it truly represents doesn’t really change anything. As it stands, we have a structural deficit in excess of $1T per year  and no realistic plan to materially change this. The truth is, that sometime in the future, both on and off balance sheet liabilities will be defaulted on one way or another. The sooner we realize this…the better.