A 50% Pick Up In Revenue In 2 Years: A Cheat Sheet For Obama's Wacky And Wonderful Budget

Tyler Durden's picture

We will spare you drinking (or reading as the case may be) the latest Koolaid from the White House. The only thing one needs to know about Obama's latest budget is that projected revenues are expected to grow from $2.2 trillion in 2011 to $3 trillion in 2013 (and $3.6 trillion in 2015). We wonder just where the tax increases will come from considering the new "compromising" administration has pretty much given up on the option of tax increases in order to get republican complicity to extend national looting and pillaging until the end of Obama's last term. What is unclear is whether the Treasury counts as revenues the interest payments remitted back to Geithner by the Fed on the trillions in monetized debt. In other words, the more debt monetized, the stronger the "revenues!"

For a full cheat sheet, see below.

From the WSJ:

FY 2011 projected revenue: $2.174 Trillion
FY 2011 projected spending: $3.819 Trillion
FY 2011 projected deficit: $1.645 Trillion
Spending as a % of GDP: 25.3%
Deficit as a % of GDP: 10.9%

FY 2012 projected revenue: $2.627 Trillion
FY 2012 projected spending: $3.729 Trillion
FY 2012 projected deficit: $1.101 Trillion
Spending as a % of GDP: 23.6%
Deficit as a % of GDP: 7.0%

FY 2013 projected revenue: $3.003 Trillion
FY 2013 projected spending: $3.771 Trillion
FY 2013 projected deficit: $768 Billion
Spending as a % of GDP: 22.5%
Deficit as a % of GDP: 4.6%

FY 2014 projected revenue: $3.333 Trillion
FY 2014 projected spending $3.977 Trillion
FY 2014 projected deficit: $645 Billion
Spending as a % of GDP: 22.4%
Deficit as a % of GDP: 3.6%

FY 2015 projected revenue: $3.583 Trillion
FY 2015 projected spending: $4.190 Trillion
FY 2015 projected deficit: $607 Billion
Spending as a % of GDP: 22.3%
Deficit as a % of GDP: 3.2%

And as John Poehling points out, to debunk Obama's lies that government spending is moderating, spending is projected to be 24.5% of GDP for Obama's first Term and 23.1% during his second term which is well above the historical average of 20% with the high end of 22% seen during the cold war of the 1980s.

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NOTW777's picture

how can anyone in the US point fingers at chinas fake data

NOTW777's picture

cnbc talking about build america bonds - now only a few days behind ZH

SilverRhino's picture

They have the GOOD drugs in these offices.  

Cleanclog's picture

Does "spending" include the wars in Iraq and Afghanistan yet or are they still off budget? 

arkady's picture

Tyler, is it not spending - it is investing.

101 years and counting's picture

revenues are expected to "increase" as the Fed gives Timmy the interest payments back at the end of each fiscal year.  since the Fed will soon own all treasuries, this amount can only increase as debt spirals out of control, and the Fed buys it all.


Dick Darlington's picture

Virtuous circle as the chair creature puts it nicely.

slaughterer's picture

Just one more algo spurt upwards, and we reach SPX 1332 today.  A perfect double of the March 2009 low of 666.  Wouldn't that make a lovely valentine's day gift from Bennie and his NYU jets for the pig men in the front seats?

DB Cooper's picture

The Fed has created a perpetual motion machine - hooray!

hedgeless_horseman's picture

Little to no mention of QE or POMO by those Fourth-Estate Vigilantes at Bloomberg...

Interest expense will rise to 3.1 percent of gross domestic product by 2016, from 1.3 percent in 2010 with the government forecast to run cumulative deficits of more than $4 trillion through the end of 2015...


Net interest expense will triple to an all-time high of $554 billion in 2015 from $185 billion in 2010, according to the Obama administration’s adjusted 2011 budget.


“It’s a slow train wreck coming and we all know it’s going to happen,” said Bret Barker,...


Demand for Treasuries remains close to record levels at government debt auctions. Investors (PD Flippers) bid $3.04 for each dollar of bonds sold in the government’s $178 billion of auctions last month, the most since September, according to data compiled by Bloomberg. Indirect bidders, a group that includes foreign central banks, bought a record 71 percent, or $17 billion of the $24 billion in 10-year notes offered on Feb. 9.


Still, about $4.5 trillion, or 63 percent of the $7.2 trillion in public Treasury coupon debt, needs to be refinanced by 2016. That gives the government a narrowing window as growing interest expense will curtail its ability to spend.



TJWP's picture

Perhaps someone from the federal reserve or treasury will simply bring sacks of benjamins to Obama's office 3 times a day, which he can then drop while flying Air Force One over the USA, raising consumer spending and therefore taxes.

dick cheneys ghost's picture

turn out the lights............its over..........

Cognitive Dissonance's picture

As someone said this morning on CNBC as they "uncovered" the printed budget live.... "Who even reads this thing?".

Even though the guy was talking about the government wasting money on the printed version of the budget, his statement pretty much says it all.

SilverIsKing's picture

Saw that too.  Maybe it was a backdoor plug for the Kindle.

gwar5's picture

Their assumptions are always magical.

CNBC will say the shortfall was unexpected. Bases covered.

Zero Govt's picture

Barrack 'Whacky Tobaccy' Obama has been sucking hard on some big spliffs to come up with a rising income... an economy 3 years deep into recession and Washington's still in LaLa Land 

SantaFeDave's picture

Please don't denigrate marijuana like this.  Figures comprised in this budget can only come from hardcore meth or opiate usage.

Cognitive Dissonance's picture

Just goes to prove that Mary Jane is the gateway drug to QE 3.++

slaughterer's picture

Would anyone in here short the RUT at its current resistance point of 826? 

centerline's picture

This is all so laughable at this point.  I wouldn't even know where to begin.  Everything points to a deflationary feedback loop, which indicates that the reality is Fed monetization into the great beyond.  Either a black swan gets sucked into the printing press and jambs up the gears - or we all get to shout out together "Shazam" as the slope to the tangent to our parabolic ponzi scheme curve approaches infinity.

Cognitive Dissonance's picture

"To infinty.....and beyond."

Buzz Bernanke.

Backspin's picture

Atually, tt's not parabolic, it's exponential, which is worse.  But yes, I get your point exactly.  This is some really bad stuff going on and the general population just doesn't realize it yet.

DonnieD's picture

I love how he magically reduces the deficit by 500+ billion next year. That is hilarious.

centerline's picture

My wife uses the same math (LOL).  

Charles Wilson's picture

The Shopper's Rule:


"Look how much I saved!"



Blano's picture

By not only increasing revenues by 20+%, but by actually projecting DECREASED spending from FY 2011.  When was the last time THAT happened???

buzzsaw99's picture

In other words, the more debt monetized, the stronger the "revenues!"

And the higher the gdp too!


Shameful's picture

I'll take a crack at it.

When Zimbabwe Ben drowns us in his liquidity stream it will rock the hell out of prices. Wages will follow, but lag inflation, as is the norm. The increase in wages will of course increase tax revenue and drag people into higher tax brackets. All Ben has to do is get milk and gas to $20 and we should be able to hit these numbers no problem.

centerline's picture

I'd speculate that the dynamics of our current situation will result in a pronounced lag effect.  Peripheral jobs (non-essentials) will get clobbered the worst.  It will all be about proximity to the essentials and the supply chain.

Shameful's picture

One only needs to crack open a history book and see what will happen.  The traditional middle class jobs will get hammered.  The educated classes that are highly specialized get absolutely destroyed as their wages don't even come close to keeping up with price increases.  In the past the producers of the more core goods and services tended to do better.  However we have largely outsourced those, or few jobs remain in the field because of automating, such as farming.  It will be quite bad.

But this does not change my argument.  If one raises the notational price of goods high enough it will provoke a notational increase in wages to some degree.  Such an increase can and will be captured by the revenuers.  Example prices increase 100%, wages increase 50%.  Well that 50% increase in wages will be taxed by Uncle Sugar in full so Uncle Sugar's notational revenue will increase as the purchasing power of the slave...err serf...err... citizen is radically reduced.

blunderdog's picture

I was thinking pretty much the same strategy, but in that scenario, there's NO WAY the expenditures fall as projected.

Shameful's picture

WAD (Working As Designed)

Since when have the projected expenditures not been some fairy tale from candy land?  When those expenditures are that big and come right from a pixies backside you can know how well and truly scared the US is.  That is really their best case projection for spending...

blunderdog's picture

Yep.  Really, we should just triple or quadruple Fed spending, anyway.  It's the only possible source for economic growth these days.  Would be great for equity prices.

It's taking way too long for the rest of the planet to burst into flames.

ElvisDog's picture

Two problems with your scenario - if prices rise by 100% most spending is going to rotate into food, energy, and other necessities. Discretionary spending would collapse. Since we're a service economy, if discretionary spending collapses the overall economy collapses too. The other problem is that if prices rise by 100% in a short period we would have social unrest, and social unrest is really bad for tax revenues.

Kayman's picture


Now all you need to do is pass a law making all things ceteris paribus. And Deficits and Printing become a thing of the past.

Damn, this running an economy with moving targets is like playing Wack-a-Mole.

Gee, Ya think Ben and Obi ?

buzzsaw99's picture

We've got to fund that trade deficit somehow! It's been down lately:


brusty4's picture

Lower tax rates resulted in higher revenues in the past.  Just saying. 


ZakuKommander's picture

Yeah, the lower tax rates in the last decade are reaping benefit after benefit.

brusty4's picture

Revenues have risen.  Record high in 2007 before the recession hit.  We have a spending problem, not a revenue problem. 

Hondo's picture

I'm willing to bet the deficit in 2015 will be north of $2T........and when you take the funny money accounting out it will be even higher......by the way someone needs to audit the BLS and their methodologies....

SheepDog-One's picture

I have to get this White House Kool Aid recipe, it must be a humdinger!

NotApplicable's picture

1 part Everclear,

1 part sugar (or HFCS if you are in a junior position)

Prof Gulliver's picture

And 2 trillion parts POM(O) juice.

Grifter's picture

Breaking: None of this matters, as scientists are hot on the trail of Tyche/Nibiru/Planet X/Nemesis

Translation: We are totally screwed.

Largest planet in solar system could be about to be discovered - and it's up to four times the size of Jupiter:



Edit: Binary system, bitchez (I can cross off "submit a ZH 'bitchez' comment" off my bucket list now!)

Bam_Man's picture

We wonder just where the tax increases will come from...

Three words: Value Added Tax (aka National Sales Tax)

I predict that the implementation of this tax will co-incide with a bi-partisan re-writing of the healthcare bill to include a "public option". Obama "the Great Compromiser" strikes again.