Fiscal Cliff Thoughts 12/31/2012

With about 6 hours to go, I am reading a report saying a deal is close on avoiding the fiscal cliff, with just a few sticking points to be ironed out. I don’t know the details yet, but I doubt that it matters too much. I don’t think anyone ever expected rates to increase on most of us, regardless of whether the deal was done a few weeks back or even six months from now. Here’s what you need to know…while Republicans and Democrats have been engaged in an epic battle over whether to raise taxes on the “wealthy” by $25B per year or $50B per year….your taxes were raised $125B for 2013 due to the expiration of the payroll tax cut.

Now honestly, this probably needed to be done…especially if you are in the camp that believes the social security trust fund isn’t make believe. But the truth is, FICA is an income tax no different than any other, and while they distracted the country over the last month arguing over whether “wealthy” was defined as $250k per year or $1M per year….both parties quietly raised everybody elses taxes 2%. I’m waiting for the outrage that won’t come because let’s be honest…as a nation, math really isn’t our thing.

 

Daily US Deficit For 12/28/2012

The US Daily Surplus for 12/28/2012 was $4.0B, bringing the surplus  to $22B with 1 business days remaining in December. Today, 12/31/2012 will likely record a large deficit in the 15-25B range, but we’ll have to wait till Wednesday afternoon to find out. Last year, the deficit for 12/31 was $19.7B.

 Happy New Years to All…be safe and enjoy the day off. I’ll be working tomorrow…note to self…in my next life, choose a career other than accounting!!

12-28-2012 USDD

Daily US Deficit For 12/27/2012

The US Daily Deficit for 12/27/2012 was $3.6B, pulling the surplus down to $18B with 2 business days remaining in December. It is still pretty close to 50/50, but leaning a little closer to ending up in the red again for the fifth straight December despite some favorable timing of outlays.
I know I promised a 2012 deficit preview last week, but have decided instead to just wait until we have the finals. 12/31  DTS will be out 1/2/2013 at 4….it will probably take a day or two to assemble from there, but if you can’t wait, I’m guessing that the 2012 cash deficit will be around $1.12T compared to last year’s $1.26T. The $140B improvement will be primarily due to a revenue improvement and flat outlays.

12-27-2012 USDD