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copernicus

Jan 02
0

US Daily Cash Deficit 12/31/2013

By | Daily Deficit

The US Daily Cash Surplus for 12/31/2013 was $21.4B pushing the December 2013 surplus to $54B, and the 2013 full year cash deficit to $660B. As expected, revenues were strong led by $39B of GSE dividends…including the $25B related to Fannie’s pretend tax assets. Outlays were also strong as $6B of interest was due and a slew of payments that typically go out on the first of the month were pulled into December with 1/1 being a holiday…..of course this happens every year, so it doesn’t really cause a timing variance.

12-31-2013 USDD

I’ll have a more detailed 2013 post up in a week or so, but the bottom line is that 2013 was an impressive year, with revenues up 14% and outlays down 1%…good for a $436B improvement from $1.096T in 2012 down to $660B in 2013…the first sub $1T deficit since 2008.

 

Jan 01
0

December 2013 Update: Social Security Enrollment

By | Commentary

Just a refresher to start off…the Social Security Program covers nearly 58M people with an average monthly benefit of $1184 per month based on my calculations. Of the 58M, 38M are retired workers, 9M are disabled workers, and the rest are generally spouses and children eligible for some form of derivative benefit.

The recently released December numbers show additions of 62k people, 57k of which was the retired worker program, with most of the other categories more or less netting to zero. Compare this to last December, when 59k were added to the retired 99k were added in total. So retired workers are more or less flat, but still running at a 1.172M pace not far off the 1.240M record set back in 12/2009.

In the remaining categories, the biggest story is that the disabled worker category, for all of the headlines about record levels, only added 924 people for the month, though obviously setting a new record. The annual growth rate is now down to +115k, down to about a quarter of the record 416k pace set back in  11/2010. Now granted, it’s definitely not a good thing that we have nearly 9M disabled workers, but at least for the time being, the growth rate has dropped from 5% to 1%….a small victory, but we’ll take it. More or less, it seems that aside from retired workers, the rest of the SS population has stabilized…for now.

Retired Workers TTM Growth:

2014-01-31 Social Security Workers TTM Delta

You will probably want to click on this chart to make it bigger, but it shows the annual rate of change in retired workers starting in 2000 when the rate was 227k all the way through December 2013. The primary reason I track this data series is because we all hear that there is a huge wave of boomers that will be retiring over the next 10 years or so. We are already adding enrollees at a very high rate…I want to see when/if the rate starts growing and I think this chart will be the alarm. Since this is the largest piece of spending in the federal budget, understanding growth in this program is critical to forecasting future outlays. For now, we remain on a high plateau adding nearly 1.2M people per year with no noticeable change in December.

Looking ahead, it turns out that a lot of people historically retire in January…last January the rolls added 171k people… nearly 3X as in December. It will be interesting to see if this trend continues, or if our “booming” economy and stock market convinces some of those people to put off retirement.

Dec 31
0

US Daily Cash Deficit 12/30/2013

By | Daily Deficit

The US Daily Cash Surplus for Monday 12/30/2013 was $14.8B. bringing the December cash surplus through 30 days to $33B.

12-30-2013 USDD

Looking at the chart remember we have synced up 2013 and 2012 on days of the week….we are comparing December 2013 through Monday 12/30 to all of December 2012…which ended on a Monday and has one fewer business day than 2013. The timing scrambles things up a bit, but expect large outlays 12/31 and even larger revenues…pushing both over 2012 levels and pushing the surplus north of $50B. Then…it’s on to 2014!!

Dec 30
0

US Daily Cash Deficit 12/27/2013

By | Daily Deficit

The US Daily Cash Surplus for Friday 11/27/2013 was $6.1B bringing the December 2013 surplus through 27 days to $18B and likely headed to $50B+ once Freddie Mac’s $30B New Year’s present is delivered tomorrow afternoon.

12-27-2013 USDD

Taxes withheld are up 2% YOY, taxes non withheld are up 4%, and corporate taxes are up 4%. Not terrible numbers, but not good enough if your expectation is +10%. Overall revenues are down 3%….a number that will no doubt reverse once the Freddie check clears….which is fine, but don’t expect a repeat next year…or the next…or the next. Between Fannie and Freddie, we are looking at about $75B of phantom 2013 revenues…and that’s just related to the write up of their faux tax assets.

It looks like 2013 cash revenues are likely to come in at around $3.150T…inclusive of the $75B from Fannie/Freddie write up of deferred tax assets. I’m assuming that wad is spent….and will not repeat in 2014. Now…just for revenue to get back to break even for 2014, you need 2.4% across the board growth….which is more or less what the economy is supposedly growing at.  Clearly…anything is possible, and I missed this by about $200B last year, but I’m quite skeptical we get anywhere close to 10% YOY revenue growth in 2014.

 

Dec 27
0

US Daily Cash Deficit 12/26/2013

By | Daily Deficit

The US Daily Cash Surplus for 12/26/2013 was $2.4B bringing the December 2013 surplus with 3 business days remaining to $12B.

12-26-2013 USDD

No real changes to note….revenues gain a bit of ground and outlays give a little back. This is about the cleanest true YOY comparison we are going to get with the upcoming Freddie Mac “dividend” tainting the true revenue stream. So as of today,with all the SS expenditures done and all of the holidays behind us, we are showing a surplus,  but there’s really nothing to like here with revenues down 3% and outlays down 1%.

Recall…we are starting in a huge hole…$17T+ of debt…and while the digging has slowed a bit from the ~1.6T per year pace in 2009 to the ~$700B we will likely end 2013….$700B is still a huge number. If we ever to balance the budget…..and I’m on record as highly doubtful….we are going to need to string together another 3-5 years of solid revenue gains….just to get to zero. Without a doubt 2013 has been an impressive year…with ~+13% YOY revenue gains and a ~1% decrease in outlays for a $400B+ YOY improvement.

But…if December through 26 days is a sneak peak of what’s to come in 2014 and 10%+ revenue growth is over…we’re  pretty much screwed (but we already knew that right). Now…maybe it’s not….maybe it’s an anomaly….we really won’t know until April-2014. If at that point, revenues are up another8-10% over 2013’s record showing…perhaps some sliver of hope will remain. But if instead we are in the low single digits, you can kiss….those rosy CBO estimates of a $382B 2015 deficit (and the 2023 $985B deficit) goodbye.

There are already signs that the fed is on the cusp of losing control of rates with the 10 year breaking 3%…nearly doubling from a year ago. and the 30 year inching up pretty close to 4%…up over 1% from just earlier this year. That, on top of SS, medicare, Medicaid, and whatever happens with Obamacare….there are huge cost pressures that are likely unstoppable…If we don’t get revenue gains to offset them the deficit blows up… debt continues skyrocketing, and sooner or later rates spike, or people just aren’t willing to lend the crackheads (that would be us) any more cash. And that’s when it gets really interesting. This is likely inevitable….but the unknown is when? Anybody who says they know is a liar…I could envision scenarios where it gets real ugly real fast…..I could also envision scenarios where this juggling act going on far longer than would seem mathematically possible. That’s what makes it interesting, and that’s why I’m still paying attention….