Seeing Red (Ink)
An all-time record deficit fails to deter those who may really want to make it worse.
While we wait for the finalized deficit numbers from the Treasury Department, what we already know about the results of the past fiscal year should be enough to make anyone sick.
The Congressional Budget Office last week estimated that Uncle Sam’s deficit for the fiscal year that ended on September 30 was “about $1.4 trillion.” You know that things are out of control when the word “about” precedes a figure so large that only goes out to one decimal point.
That $1.4 trillion is more than triple last year’s deficit of $455 billion and almost nine times the $162 billion recorded in the fiscal year that ended on September 30, 2007.
Well over half of the “about” $945 billion increase in the reported deficit ($1.4 trillion less $455 billion), or roughly $520 billion, is due to decreases in receipts from economic activity:
On a quarter-by-quarter basis, the decay in collections has mostly accelerated. Here’s the year-over-year change in receipts from economic activity by quarter for the past two years:
- +5.7% — Quarter ended December 31, 2007
- –1.4% — Quarter ended March 31, 2008
- +5.1% — Quarter ended June 30, 2008
- –2.8% — Quarter ended September 30, 2008
- –9.3% — Quarter ended December 31, 2008
- –18.0% — Quarter ended March 31, 2009
- –30.9% — Quarter ended June 30, 2009
- –16.2% — Quarter ended September 30, 2009
You might think that the September 30, 2009, results are cause for cheer. Think again:
These results, based on looking at the sum of all daily receipts and refunds during the two quarters, show that serious current shortfalls have spread to the “withheld” category. By stark contrast, withheld income and employment taxes were actually 2.8% higher during the September 30, 2008, quarter than they were in the same quarter of 2007.
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Tom Blumer owns a training and development company based in Mason, Ohio, outside of Cincinnati. He presents personal finance-related workshops and speeches at companies, and runs BizzyBlog.com.
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8 Comments
1. BackwardsBoy:I once thought that politicians were just a little bit ignorant about economics, but this has gone on long enough that I’m now convinced this is being done on purpose. I still cannot understand why.
Why are our leaders working so hard to bankrupt our country? Why are they so determined to drive down our standard of living. Why have they turned against their fellow countrymen?
Is this how we truly want to live?
Oct 16, 2009 - 5:30 am 2. dr strangelove:“We’re surrounded by either fools or knaves”
I vote fools.
Oct 16, 2009 - 6:15 am 3. Sebastian Shaw:Most of the politicians are self-interested, selfish only looking out for number 1; the Democrats want to grow government no matter what the cost & the consequences. They want to control the little people unaware that we the people are their bosses–not the reverse. I fully expect 2010 to be a bloodbath for the Democrats given all of their ideas have made things worse. They cannot blame the Republicans since they have the votes to pass anything they want. We the people have scared the Congressional Democrats given most are up for re-election next year.
Oct 16, 2009 - 7:13 am 4. Old Soldier:Paging Dr. Galt, paging Dr. Galt.
Oct 16, 2009 - 7:21 am 5. Cybergeezer:Oh, Yea; More welfare from Obama; And forced, too:
Oct 16, 2009 - 9:53 am 6. arthur:http://blog.heritage.org/2009/10/16/morning-bell-obamacare-puts-you-on-welfare/
the unhappy truths of international capitalism, have something to do with this, and we cannot blame one party as both are governing,likewise the deficit and trade debt grew most during the republican controlled bush years.
Oct 16, 2009 - 10:59 am 7. Sebastian Shaw:Arthur, President Obama has passed a bill–the “stimulus” bill–that spends more money than the previous 43 POTUS COMBINED! More nasty little harpies are going to hatch from the failed Porkulus debacle as it becomes an albatross around Obama’s neck…
Furthermore, Obama cannot complain about the deficit when he himself quadruples it! And this same Porkulus was meant to keep unemployment at 8%. Unemployment is nearly 10% Arthur.
You might want to use another example Arthur.
Oct 16, 2009 - 12:20 pm 8. Banned by Huffpo:If you haven’t converted your pesos, er, dollars to gold yet . . . it might be too late.
Oct 16, 2009 - 6:47 pm