When Will the Press Catch On to Uncle Sam’s ...

kirkles · Congressional Page Joined: 26 Oct 2007 Posts: 2

When Will the Press Catch On to Uncle Sam’s Collections Meltdown?

By Tom Blumer
April 22, 2009

In April 2008, the US Treasury collected an all-time record $407.3 billion ($403.75 billion after subtracting the first $3.35 billion wave of stimulus checks, which really should have been treated as outlays, that went out just before month-end). It was an indication that, as I said at the time, "many (entrepreneurs, businesspeople, and investors) are thinking, in the face of relentless media harping to the contrary, that 2008 will be at least as profitable (as 2007)."

This year, it's shaping up to be the "Bailout Year Bummer." Uncle Sam's fiscal year began on October 1 of last year, mere days before Congress passed the legislation that has come to be known as TARP, and a bit more than three months after Nancy Pelosi, Barack Obama, and Harry Reid promised to starve the economy of energy and punitively tax its highest producers, creating what I have since called the POR (Pelosi-Obama-Reid) Economy.

Through March, federal receipts were running 14% behind the previous year. Each month during the fiscal year has trailed the previous year, and degree of the difference has steadily increased.

My estimate of April's final result is almost 40% lower than April 2008, and further ratchets down the trend of collections decay that goes back to last summer. The receipts shortfall is far more than one would expect from an economy that shrank only 1.74% in the final half of last year (without annualization, the economy shrank 0.125% in the third quarter, and 1.614% in the fourth). It is also probably far greater than the White House and the Congressional Budget Office are anticipating.

It would appear that getting to $250 billion by month-end might be a stretch.

So when does the receipts crater become news?

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