Sep 23
0

US Daily Cash Deficit 9/20/2013

By | Daily Deficit

The US Daily Cash Surplus for 9/20/2013 was $4.9B pushing the September 2013 surplus through 20 days to $39B.

09-20-2013 USDD

Friday was actually a pretty good day, with Revenues gaining about $4B YOY and finally catching up with last year, ending at $+1B…good for a 0.5% YOY improvement. “Taxes not Withheld led the charge with nearly a $2B improvement, actually increasing from the prior day, where we typically expect these to start tapering off pretty heavily as all of those checks that were “in the mail” are received and cashed.

With six days left before the end of the FY, there is a bit more uncertainty left than I expected. First there are the Freddie/Fannie Dividends…which look to be about $10B higher than last year. Second is the extra day…a Monday (typically strongest weekly revenues), and finally, it is impossible to predict how “tax deposits not withheld” are going to finish the month. Were it not for these things, I’d probably guess we would see very little deficit action  over the rest of the month, ending right about a $40B surplus. However….given these outstanding items…. a $70B surplus (my initial forecast) still seems like a possibility if the stars align. If not… a bit lower.

Sep 20
0

US Daily Cash Deficit 9/19/2013

By | Daily Deficit

The US Daily Cash Deficit for 9/19/2013 was $1.7B bringing the September 2013 Surplus through 19 days to $34B with seven business days remaining. We are still seeing strong cash inflows from “taxes not withheld” at $5.7B, but they do appear to be tapering down, which is what we would normally expect….ending under $1B per day by late next week. As it stands today, YOY, corporate taxes are up 1%, excise taxes are up 5%, taxes not withheld are up 7%, and taxes withheld from paychecks are up 12% :(.

09-19-2013 USDD

All together, revenues made up another $1B of ground yesterday but are still $2B under  September 2012 thanks to the decrease in TARP repayments. Another day…no surprises.

Sep 20
0

House Republicans Propose Cuts To Food I-Phone Stamps

By | Commentary

From money.com the bill would cut $40B from the program over 10 years. For the math impaired…that’s $4B per year….yawn… But that’s not really the point I want to make. A while back I posted Hungry Kid = Irresponsible Parents detailing the actual cost to provide calories from different staples.

It turned out that providing 2500 calories a day for a month ranged from a low of $12.88 for vegetable oil (probably not a good idea, but a good reference point nonetheless) to a high of $475.26 for T-Bone Steak. More realistic perhaps was rice at $16.31, beans at $38.22, bread at $49.38, and chicken at $77.04.

Now…before someone goes off on how unhealthy all of these things are….since they aren’t organic and have a lot of carbs ect….that’s not what we are talking about. We aren’t comparing healthy diets to unhealthy diets….we are comparing not eating at all (decidedly unhealthy)…kids going to bed with nothing in their bellies….to how much it would cost to get something…anything even…onto that kids dinner plate.

And the answer is not very much at all. Using store brand bread, peanut butter, and jelly, you would be hard pressed to spend more than a $0.25…and that’s with a ridiculous amount of PB.

So here is my hypothesis….Food stamps aren’t really about food at all…they are about I- Phones, $100 a month cell phone plans, and countless other crap that the poor couldn’t afford….were it not for food stamps. It’s welfare…not just for the poor, but for the corporations who peddle them crap they don’t really need. There are 47.6 million people on food stamps per the article…..I’d be surprised if more than a million of them really need food stamps to ensure they have the $2 it would take to cook up a pot of beans and rice to avoid going to bed hungry.

What actually happens is this….any family that has at least one person working has enough money to at least feed themselves and put a crappy roof over their head. How do I know?….because I’ve done it. Not so long ago, while still in college, my wife and I had a monthly budget of $1200, which was about what we made from our two part time jobs. I don’t remember exactly, but we probably made about $7 an hour. That got us a 1 room apartment, food, bills, insurance and gas for two craptacular cars. Hell…we even had cable. It wasn’t the good life, but I surely never went to bed hungry. For the record, this was in back in 2001….not the 1950’s 🙂

So…while tight, the truth is…the simple life doesn’t really cost that much. Now take a family of four on a tight budget, and say they qualify for food stamps…$133 per person, so lets just say $500 per month. What happens now? Assuming they were spending $500 per month on food (doubtful)….now, all of a sudden, this frees up $500 of cash to spend on other things….like maybe a few I-Phone 5S’s and a couple hundred $ per month for an unlimited family plan.

Now…if we called them I-Phone stamps…. it would be hard to justify…but if instead we pretend like the money is only being used to buy food….for people who would otherwise literally be starving to death…well, it’s hard to argue against that. But…the facts just don’t support that story at all. Rather, as I explained in Hungry Kid = Irresponsible Parent, the truth is…99% of the time, if somebody (kid or adult) goes to bed hungry it isn’t because there wasn’t enough money to purchase nourishment, it’s because they (or their caregiver) decided to spend that money on something else instead.

Using the numbers in the article, 47.6M people x $133 per month pencils out to $75B per year….compared to the proposed $4B cut. I have a better idea. Cut the entire program and offset it by cutting taxes by exactly the same amount….a $225 per person credit ought to do it. In it’s place, take $1B to set up a private charity with the mission to feed the truly hungry. Have the president promote it and introduce it to the country, but after the initial $1B…cut it loose to be funded entirely by private donations. For the those truly at risk for being hungry….and not just at risk for making a late payment to AT&T, this organization would provide a monthly allotment of staples like rice and beans, ensuring that nobody in this country goes hungry. For the 46M or so that get dropped off of food stamps(assuming 1.6M are truly in need), well, they will be forced to make better financial decisions, which might just suck for Apple and hundreds of other corporations, but tough cookies….it needs to happen anyway.


Sep 19
0

US Daily Cash Deficit 9/18/2013

By | Daily Deficit

The US Daily Cash Deficit for 9/18/2013 was $1.5B bringing the September Surplus through 18 days to $36B with 8 business days to go.

09-18-2013 USDD

Taxes “not withheld” continue to come in strongly as expected making up the ground lost yesterday and then some…perhaps a sign that  another strong finish is on deck?? Revenues are still down $3B vs last year, but if you take out the $20B Tarp revenue from last September and it doesn’t look half bad at +8%.

Using 2012 as a guide, the last 12 calendar days of last September posted an $8B deficit, suggesting that we would end this September at a $28B surplus. However, I have to think we’ll do better than that even if we don’t see an end of month revenue surge. Between moderately higher revenues, an extra day, and some generous contributions from Fannie/Freddie, we are probably on track for a $50-$70B surplus without any surprises.

Sep 19
0

Monthly Treasury Statement Vs. Daily Treasury Statement

By | Commentary, Methodology

I don’t think this will be a news flash for anyone, but as detailed here the Daily Treasury Statement (DTS) released daily by Treasury is the primary source of data used for all of the US Daily Cash Deficit posts. However, there is another Treasury report, the Monthly Treasury Statement (MTS), that the rest of the world is much more familiar with. Any time you hear an “official” revenue, outlay, or deficit number….odds are it came from the  MTS.

Now, you might be tempted to assume that the MTS is just the sum of the DTS…rolled up into a nice government report. Unfortunately, this simply is not the case. On several occasions, I spent more hours than I care to admit trying to tie the two out, failing miserably each time. After a chat with Treasury staff, I found out why…they are generated from completely independent data sets and simply are not reconcilable. During my attempts…I came across many many examples where the numbers from each report…in categories you would expect to be straight forward like NASA expenditures, were in fact off by 50-70% or more. As a result, as I’ve said before, I don’t like the MTS and I don’t trust the MTS.

Unfortunately, when I started blogging about the daily deficit last year, I made the assumption that for all it’s flaws, the MTS and the DTS were close enough. I based this on a comparison of FY 2011 and FY 2012, which over the twelve month period, despite monthly deltas, on the year was only off by $7B in 2011 and $3B in 2012…close enough for government work right?

Well, a few months ago, I decided to pull the historical MTS data and line it up with the DTS data, and while sure enough the 2011/12 FY are pretty darn close, not much else is. In fact, the average TTM difference over the last 5 years is $79B. At present, the TTM delta is $95B, with the cash deficit being $95B higher than the reported MTS deficit. Lesson learned…2 is not an adequate sample size.  This is likely to impact my world famous CBO vs CBO challenge, but I’ll tackle that another day.

While I can’t tie out the MTS to the DTS (since it’s not possible), I do have a pretty good idea of where at least some of the variance lies. The first thing you will notice about these two series is that DTS revenues are almost always higher than the MTS. The reason for this is that it represents the cash flows in for the entire federal government….and then some. My theory is that some of what ends up on the DTS is ultimately excluded from the MTS with the most prominent example being the US Postal Service. It would seem that USPS runs it’s business through treasury bank accounts, resulting in cash source of about $87B per year. On the outlays side….they have gone out of their way to make it difficult to track. They split out postal service money orders, but apparently not op costs. I assume that payroll gets grouped together with “Federal Salaries”. So as far as I am concerned, I can probably assume that the $87B of cash in is offset by probably $100B or so of outlays, contributing to about $13B of deficit (lot of assumptions there) However, on the MTS, you can probably bet that the revenues and outlays are completely excluded, and somewhere treasury makes an entry indicating a $13B loan…that I’m pretty sure will never be repaid…thus excluding it from the official deficit calculations. I catch it in the cash deficit…they purposely exclude it.

This is just the largest item….I’m sure there are more, plus untold amounts of “modified accrual” shadiness going on that account for the differences. So, I’ll just go ahead and say it….in my opinion the MTS is a bogus report that simply can’t be trusted. When all else fails….all we can rely on is the cash flow statement, and the DTS is the only timely reliable source of that for the time being. As long as government accountants can slice and dice and exclude whatever they want, you simply can’t trust the reports they generate.

So…why do I trust the DTS??? you probably are wondering? Well, I don’t dismiss the possibility for shadiness, but for the most part, the DTS is verifiable. Cash in less cash out damn well better be equal to delta cash and delta debt. Debt is separately verifiable, and cash is just about the last thing you want to lie about because it is the first thing any auditor is going to look for. Finally…these reports are generated daily with a 24 hour turnaround. Creating fraudulent financial statements takes time (I assume 🙂 ) , so the risk here is less than something bureaucrats have a few weeks to fiddle around with.