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Presenting The Truth Behind America's Fiscal And Employment Picture
Two weeks ago we penned "As US Debt Hits New Record, Fiscal 2012 Tax Revenues Are 10% Higher Than Debt Issuance" which unfortunately was very wrong: we completely forgot that tax revenues in the US are a two way street particularly from January through the end of tax season on April 15, when income and employment tax withholdings are offset by tax refunds as consumers rightfully claim (and in the process pad TurboTax revenues simply for having under-exempted themselves) what was overcollected by the government. Unfortunately, it also means that we showed the US in a far better fiscal light than it is in reality, because contrary to our conclusion that tax revenues are higher than debt issuance in fiscal 2012 (starting October 1, 2011), the reality is not only a mirror image, but worse, with total debt issued now surpassing net revenues (withholdings net of refunds) by a whopping 15%! In other words, for $710.7 billion issued in debt YTD (debt has risen from $14.79 trillion to $15.5 trillion), net tax revenues have risen only by $607 billion. Which means that contrary to conventional wisdom that the US collects in taxes modestly more than it issues, at least through the peak of tax refund season that is certainly not the case. It also means that little by little that neo-Keynesian ideal (where we hope we jest but are no longer sure) of all deficits being funded purely by debt issuance, is slowly coming true.
The chart below shows next tax revenues vs debt issuance YTD - go ahead and check: subtract year to date tax refunds from tax withholdings as of March 1 (link) and compare to debt issuance since October 1, 2011 (link).
Oops.
But wait, it gets worse.
Remember all that talk of a US employment based 'renaissance'? By definition, that would mean that more tax revenues have to be collected YTD compared to 2011, during which period the unemployment rate was logically far higher - after all it is a declining continuum, or so the BLS would have you believe. Because more people employed, means more taxes collected. Logic 101. Well, wrong.
As the next chart shows, comparing net withholdings, or total taxes withheld net of tax refunds, 2012 is now trending below the same period in 2011, by about $10 billion!
As a reminder, here is how the unemployment situtation stood at January 2011, when according to the BLS 130.5 Million people worked, when net government tax revenues were on par or better than 2012...
And compare this to the latest employment "data", when once again according to the BLS, 132.4 Million people worked.
So let's get this straight: America has seen the number of people employed rise by 1.9 million people from January 2011 to January 2012, and its unemployment "decline" by 0.7% in the same period, which means more taxes paid and thus withheld, and yet the tax collections have dropped from a period when unemployment was 9.0%?
Right.
Naturally, skeptics will say that this is purely a function of frontloaded tax refunds. Which would be great, however it is not true.
Stone McCarthy deconstructs that myth as follows:
Cumulative individual income tax refund issuance for 2012 passed issuance for the comparable period last year for the first time in the latest week. In the week ended last Friday, income tax refund issuance totaled $26.6 billion, compared to $20,9 billion last year. That brought cumulative issuance to $85.4 billion, up 5.7% compared to the comparable period last year.
Today's Chart of the Day shows cumulative refund issuance through February 17 and for the comparable period for 2012.
Refunds are lagging our forecast, however. We had projected cumulative refund issuance of $102.3 billion through February 17. We forecast total refund issuance to be up 2.6% compared to last year. However, we expected more refund issuance early in the refund seasons compared to last year, when some returns didn't get processed until after February 14.
Refund issuance this year has been delayed by a different set of problems. As we have noted in our prior updates, the IRS has made changes to its systems to prevent fraud, and that caused refunds to go out more slowly than expected in the first few weeks of the refund season. The IRS appears to be catching up, but hasn't said so explicitly. The "Where's My Refund?" page simply now says taxpayers who file electronically can expect their refunds within 10 to 21 days. It will take another week or two before we can start to make reasonable comparisons between refund issuance this year and last year.
Finally, even if in reality the government is somehow goosing (i.e., frontloading) refunds, all it means is that cash available to US consumers is higher than where it should be in reality, as all that has happened is that the variable responsible for 70% of the US economy has obtained more cash earlier than when it should have been disbursed. Which in turn means that the recent Personal Income and Spending data, which was so disappointing it caused Goldman to lower its Q1 GDP tracking forecast (and that is even before the gasoline price shock), is even worse when one factors out the time effect of refund collection - traditionally an economic boost as the cash is spent as quickly as it is received.
So.... what is this about the US economy improving again?
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Oh im already surrounded by them. I can't even mention this type stuff to most of them. They either don't believe it or don't want to hear it. Or both. We are totally unprepared for what's coming. I say "we" because that means you and I. We are oversaturated with idiots to the point that I believe any preparations we do will be washed away. For instance......you're in the country and have a garden, cows and chickens and a wood stove. You live 30 miles from a city of several hundred thousand who have NOTHING! These people will begin to finally question exactly where does a Mcdonald's cheeseburger come from and make the connection from cows and cows live in the country. There's just too many people to control this situation without mass chaos.
Yep, in that scenario only 30 miles from a city is going to be ugly. However, when the McBurger crowd from the city head out into the country they arent going to find individuals sitting on their own land, they will find large groups of heavily armed men who have been shooting since elementary school covering choke points. The farmers arent going to be sitting alone waiting for the end, they will band together right quick and when a thousand urbanites run into fifty or a hundred country boys they cant even see who start killing them in bunches from hundreds of yards away my money is on the farmers.
That scenario would be chaos for sure, but weapon skill matters- and the urban dwellers dont have it or much in the way of effective weapons. Pistols arent gonna work against guys with long range rifles, stacks of ammo and hundreds if not thousands of hours of shooting experience. When the Call of Duty player with a Glock and very little or no experience meets Joe Redneck with a deer rifle who got his first gun in elementary or middle school, its gonna be a bloodbath.
Point that finger back at yourself buddy. The youth are not going to fight your battles for you. The Boomers WERE the protesters and radicals during their youth, and once they seized power they turned into the most narcissistic generation that the world has ever seen. Not much of an example.
And the youth haven't lost anything in this so-called "collapse" because they never had anything to begin with. So don't expect much sympathy over the marginal decline in your 6 figure 401K and your 6 figure housing equity. Not from anyone under 40, the average net worth of whom is $3,000.
The youth of America are mostly just waiting for the old fucks to die so they can get jobs. They've been raised to be docile. Any note of rebellion meets with arrest by the police and being walked out of 2nd grade in handcuffs. Most of those that show signs of free thought, free spirit, and rebellion are weeded out of mainstream society and become permanent wards of the prison system well before they reach the age of 18. Or drugged into a zombie like existence using mind bending psychotropic drugs.
"If the youth in our country weren't so freaking ignorant..."
Excuse me, the youth of our country are NOT 'freaking ignorant". They are well aware of the pepper-spraydom at Davis, and the stick-save cops at Berkeley, and the OWS getting tromped on nationwide in a coordinated attack. They 'know' (or believe) that SSI will not be there for them, and they know, just like you - smartass - that our congress is totally dysfunctional.
Do you have children? Do you know *any* college students? Where the fuck you come off saying "If the youth of our country weren't so freaking ignorant..." ? I'm an old fart, with adult children and teen-age grandchildren and know a bunch of current college age kids, not all of whom are in college, and they are NOT 'freaking ignorant'.
They know they are fucked, they know it is OUR fucking fault - so why the fuck ain't you out there burning shit?
This stuff makes me furious. The 'youth of our country' ain't the problem - WE are! It is time to start hanging the PTB. I'd be ok with other, more humane possibilities though:
http://en.wikipedia.org/wiki/Guillotine
And one of my friends just got great news today: She does qualify for extended unemployment to supplement her now one-day-a-week job. She has applied for every damn thing that comes up within 45 miles for the last six months - but she is 62, 'over-qualified' and is incredibly relieved to have some return on the unemployment benefits she has paid into for 42 damn years. Some folks on this list would call her a 'parasite' on society. Some folks on this list have such a serious rectal-cranial inversion as to need a care package to eat breakfast tomorrow.
And yes, I am in a bad mood. I get really pissed off (veering back on topic) to the lies, damn lies, and statistics of my gobermint with the "nothing to see here" message:
http://www.youtube.com/watch?v=rSjK2Oqrgic
there you guys go with that fugly brush again.
Thats if you can get any of the "unemployed" to work.
As an employer doing business with other employers , our collective experience
trying to employ the" unemployed" is a horror story.
After 6 ,yes SIX,months of advertising at the State and local employment office,we
have had exactly 22 responses.Only two showed up to interview.
Our experience is replicated across our client businesses.I know of fifty jobs
unfilled,that only require common sense,puntuality, and no advanced skills that these businesses cannot fill.
We supposedly have a local 9,8% unemployment rate with 500 veterans included in that %.
The great American job vaporized right after the american worker !
The unemployed are now the unemployable.
Where are you, and what sort of work?
I could maybe use a change of scenery.
Gulfstream in Savannah is on a massive hiring spree, way backlogged. They need bodies, even without experience. Also in Charleston Boeing may need a lot of people. Otherwise Eagle Ford area and North Dakota shale industry.
To stay on unemployment benefits you have to apply to jobs. Your "jobs" probably pay dick, so they'd rather stay on the dole. That's the game, and millions of Americans are playing it. After all, why work 40 hours a week for a shit wage when you can make as much (or more in some cases) by not working? It's simply a losing business proposition.
All you have to keep benes is say you are applying.
No follow up by State even though I have requested multiple times in letters to
our Governor..
We pay well if you have a match with us.
And yes people are gaming the system because they EXPECT not Deserve a
level of pay that they think the are worth.
I wish sometimes that I could just claim UB and food stamps and watch TV all day.
I do not qualify and even yeasrs ago when I did,I took whatever was going to keep
my self respect.I have been an employer in various countries,USA,UK,Holland,Bahrain,
and this is the worst pool of labour I have ever seen.
Who wants to do honest work when Michelle Obama has a 30 person staff and jets around the world on tax payer money on fabulous vacations every month?
Who wants to do honest work when the crooks on Wall Street are still making millions (of tax payer dollars) after the bail outs?
Who wants to do honest work when there are 50 million illegals in the country working under the table and gaming the welfare system?
Who wants to do honest work? That's my question. I sure as fuck don't.
Health care is a big problem, so many jobs do not offer it. Seems like the tradeoff is around 40,000/year where you can pay for health care, work expenses (taxes, car, child care, clothing etc...). If the $12.00/hour jobs offered health care, people would take it, otherwise the incentive is to freeload and come out ahead.
Where are you located?
I am in Texas and I have people begging for work from me. Industry veterans offering 50% discounts on their services. Former business owners asking if I can throw them clients I don't take. I hate turning away friends but I struggle just to keep my tax-accountant, lawyer, medical plan, business expenses, irs, employment, and state taxes, and salaries covered. By struggle I mean I often go with little or no pay which can't continue indefinitely.
If you mean you need folks but are paying jack-shit in the middle of a massive wave of inflation then why would people apply? Working for negative return only digs a deeper hole than not working at all. By negative return is if your job requires they spend money on transportation and other incidentals just to work and those costs keep rising then the reward for doing the work is probably lower than staying on unemployment or just resorting to bartering or begging.
If you are paying good wages then maybe you aren't advertising in the optimal manner. If you are paying really good wages I would like to apply.
Martin County,Florida.
No negative investment..
For our workwe rquire a skill set that is complimentary to our trade: which is niche
marble refinshing in situ.
We like any small employer pay by what you can contribute to our profit .
The other jobs I know about range from jobs in Tire Kingdom ,Ace Hardware,Office managers,draughting staff etc.etc.
The other major stumbling block seems to be when you tell people about required drug and alcohol testing.Instant
loss of interest.We have advertised elsewhere concurrent to the aforementioned.
Same piss poor response or people that bullshit about everything ,if they show up for an interview.
You require drug tests for people who are going to do marble refinishing? WTF.
I dunno, I can certainly see why that would limit your selection of potential employees. Not everyone meekly consents to searches. There are even Americans who still believe the Constitution means something.
This isn't to say people have a right to use drugs, of course. It's only to say employers *don't* have a right to know about it.
But that whole "positive/negative rights" thing is not widely understood these days.
Its not our choice.
I agree wholeheartedly ,however
Our insurers will not pay on liability on any drug or alcohol related occurence.
Go figure,we do not want to be sued.
Dealing with IRS,OSHA,Worker comp,county and state compliance officers is too
much wasted time and money without that as well.
Corporate shield only works if your a big guy ,if your little they sue you the
directors as well.
This is one of those demonstrations of just how much power private industry controls.
The government's got its hooks in everything but can't really enforce much. The enforcement is largely provided by private business.
Given the perfectly reasonable policy of not paying insurance claims that result from drug/alcohol use, we end up with the incredibly stupid (and obviously ineffective) policy of requiring drug tests of potential future employees.
What could actually make sense would be to require drug tests of persons INVOLVED IN THE ACCIDENT that results in an insurance claim. If a guy smoked a joint and did a line a week before he applied for the job, it would have zero relevance to his capacity as a worker.
But if a guy who's passed a drug test a few years ago got drunk and high and rolled a forklift over a sandbox full of deaf children, it would actually kinda make sense to want to know that he was drunk and high at the time of the accident.
I think we've created a complex enough labyrinth of legislation that we literally cannot do anything right anymore.
As a private business owner he is within his rights to set the terms of employment within the confines of the law. I see nothing wrong with requiring drug testing. It's not the government doing it, like they do in the schools.
I personally object to it, but I've consented once in my career because the offer was too good to pass up. I have actually have found that low paying jobs require drug testing and high paying jobs typically don't. Most of the public school teachers in California never get drug tested...and more than a few would fail if they did.
Yes, I was just struck because he's having trouble filling the positions.
A private employer would be perfectly within his rights to forbid his employees from playing golf, too. Or driving a Ford, or owning a gun, whatever.
But if everyone in the area drives Fords to the golf course and shooting range, it's going to be hard to find employees.
Back to "Viet Nam" in HD on History Channel. Skill honing time.
"There must be more money." BHO
"Not a problem." BSB
BSB to Fed minions: "You heard the man...set the presses to "Lunatic Speed"".
We could see tax refunds paid in bonds or script. California ring a bell, maybe Willie Brown?
MOON beam BROWN!
100 years of accumulated "Loss Carry Forwards" Bitchezzzzzzzzzzzzzzzzzzzzz! Where oh' where have the tax revenues gone ?
Just print them up !
Amazing ZH video!!!
http://www.youtube.com/watch?feature=player_profilepage&v=cJg99tGolNI
Splendid job in reminding the sheep to think. When many get engulfed into fiat paper flames. We can only hope they’ve be schooled in proper training of Stop, Drop and Roll procedures.
Fire Marshall Bill in National Fire Safety Week
Excellent work Tyler. As always.
It also means that little by little that neo-Keynesian ideal (where we hope we jest but are no longer sure) of all deficits being funded purely by debt issuance, is slowly coming true.
what would be the other ways to fund deficits besides debt issuance?
can we get the truthFairy to help, here, perhaps?
The " Truth Fairy" ... That was priceless. That was worth 2 episodes of South Park!
Sheading jobs to boost record breaking corporate profits. Dow 15,000 and to the moon. By the way, we the (government) gambled away your money you gave to us in 2011 thru payroll deductions. We have placed calls to our sources requesting for an immediate loan. Don't worry, your government is looking after you.
I do the opposite. Why let those idiots use your money? I always pay on April 15th.
Tyler,
"So.... what is this about the US economy improving again?"
It's called Obama's re-election campaign, funded and marketed by Legacy Media.
Of course. Also equally true is the greater the divide between what the MSM reports in terms of a vastly improved economy and the average person's experience in it, the greater the likelihood of rejection of both the MSM and the powers that rely on it.
Say Tyler, I really like it when you use the government's own numbers in a creative way to show what liars they are. I'd call it econoporn.
Bernanke and Draghi Deserve The Nobel Prize For Avoiding Another Meltdown
http://www.forbes.com/sites/robertlenzner/2012/03/03/bernanke-and-draghi...
Rothschild, a London Banker, wrote a letter saying "It (Central Bank ) gives the National Bank almost complete control of national finance. The few who understand the system will either be so interested in its profits, or so dependent on its favors, that there will be no opposition from that class... The great body of the people, mentally incapable of comprehending, will bear its burden without complaint, and perhaps without even suspecting that the system is inimical (contrary) to their interests."
Nuf said. Sheeples too fucking busy texting and playing with IPADS
Greek default looms as voluntary debt deal looks set to fail European leaders are braced for the eurozone’s first ever sovereign default this week as Greece’s efforts to secure a €206bn (£172bn) “voluntary” bond swap looks increasingly unlikely.
http://www.telegraph.co.uk/finance/financialcrisis/9121151/Greek-default-looms-as-voluntary-debt-deal-looks-set-to-fail.html
Fucking Ground Hog day! Screw Ferris Bueller.
Bill Murray?
Presenting the Truth. Man, I love Zero Hedge and informative posts.
One theory that I have is low paying job creation is pushing more people into the category that pays no income taxes whatsoever. So even if there are 1.9 million more workers compared to last year, it's quite possible the reduction in the standard of living is outpacing job creation.
Speaking of America's condition, it just keeps getting better and better (worse). With friends like this at the top, who needs enemies?
...the ''old order'', you were sent to debt prison.
...the ''New World Order'', you just go home, to Prefabia and your McMansion.
...the ''old order'', you were convicted and given hard labor.
...the ''New World Order'', you go to work and everyone gets penalized.
http://www.youtube.com/watch?v=vpMNI39uXBs&feature=related
As previously mentioned, if you add 50 minimum wage jobs and lose 25 $100K jobs, you have more people employed, but the tax revenues derived drop.
This whole routine of counting and reporting ad nauseum the employed and the unemployed is a total smoke screen. What really matters is what people are actually making.
GLD & SLV
http://sheepgetslaughtered.blogspot.com
Loan sharks knew that if they took the dollars printing machines under their control they could suffocate the world ...they could initially suffocate USA and after taking the USA from the Americans, they could move and suffocate the whole world and take the countries from their people.
FED printed cheap money and loansharking multiplied this money in an unnatural way within the American economy boarders and they discarded them abroad so that they did not threaten USA. USA became the first state in the world with artificial “breathing”...
It cannot be possible but just in the USA for only the last year, more than one million houses were seized. It cannot be impossible but the New World has returned to tents and shelters ..has returned to the ages of Columbus. It cannot be possible that we allow to a few loan sharks looting the toils and the assets of people...
http://eamb-ydrohoos.blogspot.com/2012/01/global-debt-crisis.html
------------------------
Global Debt Crisis
Authored by PANAGIOTIS TRAIANOU
Is Apple Hiring Engineers In China For An Automotive Project?
http://translogic.aolautos.com/2012/03/02/is-apple-hiring-engineers-in-c...
China 2030: Building a Modern, Harmonious, and Creative High-Income Society
http://www.worldbank.org/en/news/2012/02/27/china-2030-executive-summary
Tyler- Any thoughts on the above article?
Infographic on employment & salary trends in 2012
http://mashable.com/2012/03/03/salary-guide-2012/
Thanks for mentioning "...forgot that tax revenues in the US are a two way street particularly from January through the end of tax season on April 15..."
It's not about tax cuts, but cutting government spending. Need to read a book out about citizens who 'finally' take a stand against this over spending govt. of tyranny. I recommend it. It's a thriller that's so real.
www.booksbyoliver.com
Obama is being vague on his tax cuts this year (election year). Wonder why politicians never talk about tax cuts during off year elections?
http://capital3x.com/trades/first-news-more-than-800-banks-from-ecb-coll...
German banks dominate the 800 list from ECB.
Although, Wall Street and the Bankers may have seen a recovery and a return to Wealth, for the average American they have seen the opposite.
Almost all Americans have tightenen their belt. They have payed down or paid off Debt, as they are in self survival mode. They are doing the exact opposite of what Bernanke wants them to do. At this point I know I and many others that are using any discressionary income to reduce debt.
Everyone I know has turned down there thermostat to 60 in the winter. Pulled in spending and cut down or cut off services. I know I went from a regular unlimited cell phone to a $10. per month prepaid cell phone. Many are getting rid of Cabel TV or going to Basic TV. Driving less and consolidating trips. Paying off your Car and driving it until it totally dies from over consumption. Most including myself have stopped going out to eat and makeing meals at home from scratch and ditching the pre prepaired meals at the store. I do not even go shopping anymore except for groceries. I have not bought any new clothes for 2 years and am making do with what I have. So, many have started to grow gardens again. That is savings on the high prices at the grocery store. So many other ways. Like not using a dishwasher unless it is absolutely full. Same with the washing machine. These may be small things but they add up.
The biggest problem is that these habits are becomming ingraned in the American people and it may take a generation for them to change. I remember my Father and Grandmother from Depression. They never gave up their frugal ways, it became a lifestyle. Even when they did not have to live that way. The same is happening with America today.
I also think that in a subconcious way that as America National Debt gets higher and higher that Americans almost try and control it by spending less themselves.
It is like a gigantic credit card bill that is being run up on all Americans and the only way to control it is to spend less ourselves. That is the only thing that we know to do. Almost like if you had a giant credit card bill the only way to get out from under is to pull in your belt and keep paying it down.
Has anyone read 'Cracking the Code'? I'm running out of time.
I'm a retired nsa cracker, does that help?
http://expose2.wordpress.com
When the truck drives off the cliff, for a moment, it doesn't look like it's falling...
... until gravity starts to do its work.