Another month has come and gone. We are all now 28 days closer to death….whenever that will be. We are 28 days closer to the day our star, the sun, runs out of hydrogen, begins it’s transition to a red giant, and ultimately cooks the earth into crunchy black char ball before destroying it altogether. And… perhaps even more ominously… we are 28 days closer to the day the US government begins defaulting on its on and off balance sheet liabilities. For all of these certain future events, we can’t predict the exact date they will occur….but we do know with absolute precision that we are one month closer to the day of reckoning than we were a month ago.
DEFICIT:
But enough gloom and doom, let’s crunch the numbers and see what happened in February and what it means for the big picture. As we have discussed in prior posts, February is almost always the worst month of the year for deficits, even back in the good ol’ days like 2000 when we kinda sorta actually had an annual surplus…depending on what kind of accounting you used (shady vs. shadier??) So we came in at $229B…a bit under last year, but right in line with the last 5 years. Clearly what little improvement we have is immaterial…a mere 8% improvement, and there is a good chance most of that is related to delayed tax refunds.
REVENUE:
The biggest deficit related news in the last few months may have been the President’s tax hikes…namely about $60B per year on the wealthy…and about $120B per year on those of us who pay payroll tax. So let’s take a look at revenues by category with this screenshot from excel. You may recall that 2/2013 revenue was $95B vs. $80B last year. I need to clarify that this is “net” revenues….We take all revenues from the sources listed below, then subtract tax refunds to get net revenues. Since February is especially heavy in refunds, the net is always much lower than other months, but we apply it consistently, and I am much more comfortable with this accounting approach.
