The US Daily Cash Surplus for 7/12/2013 was $0.7B bringing the July 2013 deficit through 12 days to $76B. Revenues are still showing some weakness…at 4% YOY growth, but there is a good chance that improves a bit this week as corporate taxes start flowing in. Furthermore, the extra day over 2012 should give July 2013 a ~5% bump at the end…at August’s expense.
The US Daily Cash Deficit for 7/11/2013 was $4.9B bringing the July 2013 deficit through 11 days to $77B. Revenues are still trending low at 4% YOY gain. Next week could bring a change in fortune, as the 15th usually brings a spike in revenues….hopefully it will be enough to bring that YOY back up to 10% or so.
There is one interesting data point I would like to point out…business tax refunds are up 77% from ~$1.1B to ~$1.9B compared to last year. At less than $1B, it’s really not material, just interesting. So far, gross corporate taxes recieved are down a bit, but essentially flat YOY…we’ll know by the end of next week if the refunds numbers are an ominous sign that corporate taxes are headed down, or if it is just an immaterial timing blip.
The US Daily Cash Deficit for 7/10/2013 was $9.5B pushing the June deficit through 10 days to $72B. With 1/3 of the month gone…revenues are up a meager 4%. This will be helped some by an extra day vs 7/2012…perhaps as much as a $10B (or 5%) bump, but August should give that right back. Outlays…adjusted for timing look more or less in line with last year, perhaps a few billion lower.
Over at money.com Jeanne Sahadi has a front page article that is trending U.S. books $117 billion surplus in June. It’s not a terrible article, but the ignorance displayed in the comments section is a bit frightening. Everybody thinks we are saved….We aren’t. No doubt, 2013 is going to be a material improvement, but it is still going to be a $700-$800B deficit. So yeah…it’s great that we aren’t blowing through $1.6T per year anymore like we were not that long ago…. but $800B per year…with $17T accumulated…no matter how you look at it…that’s a huge hole, and we’re still digging at a ferocious pace.
Above is the latest output from the model I use. We can see clear and steady improvement from 2009 forward as revenues picked up and cost was more or less held constant. There is no rocket science in the model. After spiking 12% or more in 2013 on tax hikes, I assume most revenues will grow at 5% in 2014 and 4% from there on…more or less in line with historical patterns. On the cost side, I assume 2% or so annual growth from 2014 on for most outlays, with a few notable exceptions. Social Security grows at 6-7%, and interest grows along with debt outstanding, but it held at about a 1.8% effective rate…extraordinarily low. For Medicare, Medicaid, and the Affordable Care Act, I use the CBO’s numbers. Using these fairly simple, and I believe realistic assumptions, I show we bottom out in 2013/2014 on increased revenues, before heading back up as spending increases on Social Security, Interest, and Healthcare outpace and run away from the modest annual revenue gains. Note…this all assumes no recesions, crashes, wars ect… although historically, it seems quite unlikely we will go another decade with out some kind of economic disturbances. I guess what I am saying is tis may end up being a conservative forecast unless the CBO is correct, and we manage to string together a few more years of 10%+ revenue gains. We all know anything is possible, but historically, it seems quite unlikely. Guess we’ll have to wait and see.
The US Daily Cash Surplus for 7/8/2013 was $3.4B on typically strong Monday cash receipts. Revenues are up YOY by 7%, but it will probably be a week or two before that firms up…. there can be a lot of variability. The rest of the month should be rather uneventful….just the large SS payments for the next 3 Wednesday’s, and some corporate tax deposits likely on the 15th. I still have my guess at around an $80B deficit to end the month, but I will revisit in a few weeks and we have enough data to make a better guess.
We haven’t looked at this in a while, but the cash balance is now $92B. If we run another $25B for the rest of the month, we enter August with ~$67B….I am projecting about a $125B deficit for that month, leaving a $58B shortfall. however, Treasury has a knack for creating imaginary money and $58B…given their previous magic tricks…I have no reason to doubt they can come up with $58B to get through August somehow. If they get through August and the first few days of September…making it to October should be a breeze since September will see heavy cash inflows as a quarter end. That makes October the do or die month for the debt ceiling. At that point, cash will be down to near nothing, and we will be staring at a couple of $100B+ deficits in October/November….I don’t think they can squeeze $200B out of “extraordinary measures”…so Right now, I’ll peg the drop dead date at October 3rd at the latest….the day about $25B of Social Security payments need to be made. Just to recap….This assumes tax revenues continue to come in about 10% over last year, and that Treasury can squeeze another 60+B or so out of extraordinary measures between now and early September.
The US Daily Cash Deficit for 7/5/2013 was $5.2B bringing the July Deficit through 5 days to $59B. Although it’s only 4 business days, we have more or less a comparable full week to 2012…Revenues are up 7%. Cost…if we add back the $30-35B to July 2012 that was actually paid in June, we are pretty close to even. It’s still too early to tell, but 7% is a healthy gain so far (better than a decrease) and I would expect to build somewhat on that…especially with one extra business day over 2012 which we would expect to add about 5% or so of revenues and cost. So…looks like same old story…flat cost and ~+10% or so revenue gains. It’s a really good story….let’s hope it doesn’t end soon.
