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As US Debt Hits New Record, Fiscal 2012 Tax Revenues Are 10% Higher Than Debt Issuance
Today, the US total debt rose by $32 billion touching on a new record high of $15.392 trillion. As a reminder this is just the beginning: as we noted yesterday, according to the president's own budget total US debt is now expected to surpasses the greatest and final debt ceiling of $16.4 trillion just around September, and likely sooner with the addition of the $160 billion in additional debt needed to fund the extension of the Bush temporary yet perpetual tax cut through the end of 2012. So while we know that total debt to GDP is already over 100% and unlikely to ever decline back to double digits, thus putting into question the marginal utility of debt to generate further economic growth, another just as important question is what is the incremental utility of tax revenue relative to debt issuance, i.e., is America now issuing more debt than it is collecting from tax revenues: a step which would further cement its status as a banana debt republic. The chart below should provide some comfort in that regard. In fiscal 2012, starting October 31 through today, the US has collected $677.6 billion in withholdings taxes, while issuing $601 billion in debt over the same period of time. In other words, for now at least tax revenues are running 12% above debt issuance. Alas, considering that according to the president's own budget there is another $1 trillion in debt issuance over the next seven and a half months, we have a very distinct feeling the red line will cross the blue line yet again, and quite soon at that. Naturally, a logical question arises: why not just do away with taxes entirely and have all US capital needs be debt funded? After all, all that "saved or created" tax money would be used to buy bonds or better yet, iBonds, or something just as silly. And the USD would never, ever, lose its status as reserve currency...
Cumulative Fiscal 2012 YTD debt issuance vs tax withholdings.
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Geithner today said debt ceiling won't be breach until waaay waaaay out at the end of this year. So like 8 months from now. So lets focus on the philadelphia cream cheese index until then.
What debt ceiling?
Sucker nation is going down.
Gold price = Debt = Tax revenues.....
Which one is the dependent?
Nominal price can always increase, and the debt shows no sign of slowing down, but what about collecting taxes? Will there be taxes to collect on a still unemployed America next year? The next??
"Will there be taxes to collect on a still unemployed America next year?"
There's plenty tax to collect from the rest of the world, and that's what you need a global reserve currency for - When in doubt, PRINT! As long the suckers hold the dollar bag for US there's endless tax to collect from them.
You're starting to see holes in that bag...
They should just change it to something like 666 quintillion.
Soon Bernanke will own $666 trillion worth of USTs/MBSs/and as much hopium as Barack can smoke!
Get that pay-pah! Pay-pah!!!
Its more of a debt suggestion - easy answer pass amendment that congress can't raise "ceiling" once but every two years expect by two thirds majority of both chambers.
Mr. Lennon Hendrix said:
You can't see it because it's made from Hollywood prop glass. You need not even watch your head.
We should remember Mr.Lennon Hendrix, it is not so much a debt ceiling as it is a debt target. Mr.O'Bama clearly believes it is better to aim high and succeed than to aim low and fail.
'Waaaay waaaay out at the end of the year'....so really by end of March at the latest then?
Obligatory. Now drink.
--Sen. Barack Obama, D-Ill.
Senate Floor Speech
March 20, 2006
Bonus quote FTW. Drink again, bitchez:
--Benjamin S. Bernankinscam
February 25, 2010
Bernanke to Congress: You Are Going to Have to Cross That Fiscal Valley Yourself
Hear hear!
Hi TIS, maybe I can help. I speak Jive.
Let's see here...
"I therefore intend..." hmmm "...start making plans..." well, i see your problem, this is all Greek.
A toast to the SCOAMF!!
Many people dont under stand that Timmay pays his taxes when ever he wants. And when he/Paulson does, the IRS has legitimacy.
If the IRS has legitimacy, then the greeks can NONVIOLENTLY ....
Timmay, you had a low IQ. thats why you are a major FAIL. happens to the best of us.
Big deal....who CARES with todays Barron's headline screaming in 5 inch high letters 'DOW 15,000!!'
They should be screaming 'UN AND UNDEREMPLOYMENT 23%!!
I don't understand why debt would have to be issued if we are collecting enough revenue to cover our expenses, but I must now assume the issuance of debt, spending, and tax revenues are not related any more. We must have to issue more debt for some other reason.
Um.. headline is bass ackwards?
body text:
"America now issuing more debt than it is collecting from tax revenues: a step which would further cement its status as a banana debt republic"
reread the sentence
"I would prefer not to"
Regards,
Bartleby
My agent fee is priced in as you can see. I'm the old fashioned kind, I only get 10%.
+1 for the Bartleby reference, and for being a fine scrivener.
Oh.. I get it now.. unfortunately.
I guess we're not in Kansas anymore.
Must be all the poppies.. I.. think.. I'll go... to slee.......
Oh Bartleby. Oh humanity!
? "Fiscal 2012 Tax Revenues Are 10% Higher Than Debt Issuance"
And now read it for the 3rd time...
Again....
And again....
Go on...
Just auto Shuffle....
What budget?
Deficits don't matter. Budgets are unnecessary. There is no inflation.
Now please go back to mourning the latest celebrity death and playing Angry Birds on your iPad. Thank you sir.
Contracts don't matter. Laws don't matter....rinse, repeat....
If unfunded liabilities were added to the red line it would already be above the blue line.
That graph looka lika sure sign we runnin' outta watta soon.....
How many of these articles do we have to read whining about how large our debt is before people realize that OUR MONEY SUPPLY COMES FROM DEBT!
Treasury auctions — in a fiat country, such as ours — are simply reserve drains for M0 reserves that were created by government spending. Ever since covertibility to gold ended in 1971, the auctions have served no purpose other than as a way for the Fed to target interest rates.
The Primary Dealers line up to have their reserves drained — they do this willingly, but are also obligated to, per their contract with the Fed. If the reserves don't exist for some reason, the Fed would know this in advance and just have the Treasury delay its auction until the reserves were lined up and targeted.
The funds to pay taxes and buy government securities come from government spending.
Treasury (deficit) spending creates reserves in bank reserve accounts at the Fed. When the Treasury spends, it credits these M0 reserve accounts. When you buy Treasuries, or pay taxes, the Treasury just deducts money from your bank's M0 reserve account. It's a merry go-round. And these M0 reserve accounts are crucial for our money supply to exist. They back our money supply.
Without government spending, these reserve accounts would have no money in them. And the only way you can get money into these reserve accounts is with government spending. In other words...
The funds to pay taxes and buy government securities come from government spending.
You don't buy Treasuries or pay taxes with bank loans or close substitutes for money. The Treasury doesn't take those forms of payment when the transactions are settled. The Treasury only deals with a bank's reserve account at the Fed. So, it really makes no difference if Directs, Indirects or Primary Dealers are draining their reserves accounts at the Fed.
ALL MONEY (except coins) COMES FROM DEBT, PERIOD. There is no other way to create money.
"ALL MONEY (except coins) COMES FROM DEBT, PERIOD. There is no other way to create money"
Please restate your assumptions: There is no other way to create money ... in a fiat based, interest rate targeted monetary system economy. Put a bullet to the risk-free rate and all of that "money" evaporates and its commodity status is distroyed.
*Money is a promise, a claim, a contingency and not a commodity.
Currency is not money. Damn it!
The fact that our money supply comes from debt is indeed the problem -- the current monetary system is unstable and is destined to crash. The interest on debt can only be paid if the money supply continues to grow forever (which is why deflation is supposed to be so bad). A system that must grow forever cannot be sustained. At some point, the world runs out of physical collateral on which to base new debt, and CRASH goes the system.
You must be confused. Our national debt and money supply hasn't been based on physical collateral since 1971. We are fiat. The US government can issue an infinite amount of debt if need be — particularly since the reserves to buy debt will always exist from additional government deficit-spending. The process can be (and is) infinite. Much like a scorekeeper can never run out of points, the US government can never run out money or debt that it can issue. There is never an issue of solvency. There is never a risk of the US not being able to pay its bills. The US Debt is a myth:
http://youtu.be/4HJ54RRB7OU
The faulty monetary system is the reason we are and should be whining. We should be screaming about a better way! For instance - non-debt based money, and deleveraging the debt. But that would displace TPTB, so it'll take a real fight to change anything - LOTS AND LOTS of whining in fact.
You talkin to me? Debt bomb fuse ticking. USA empire straining to breaking point. Light up Iran and re-elect Hopey Clown. Snap, crackle and POP!
Nobody believes me when I say that any recovery they see now is because the gvt is mainlining adrenaline with a firehose.
Once the bond pump slows down even a little...sigh....nobody listens.
Dont worry, those people INSIST on being the ones with bug eyes after the unthinkable happens one morning and theyre wiped out and asking 'What happened? Why didnt anyone warn me'?
You mean just like "no one saw the housing bubble coming."
"No one" meaning "no Keynesians, no one in government, and no one in the mainstream media." Of course, millions did see it coming ... but they're all kooky Austian School economists, or Ron Paul followers, or they lack an MBA parchment on their wall so who cares, right?
Damn... My tax rep at H&R Block didnt make any mention of this. He said im ok Spider
Things didn't turn out well for Spider.
http://www.youtube.com/watch?v=uPE7Qr5O6Fg
The look on Pesci's face right before he shoots Spider is priceless. He looks like a complete psycho.
Great movie. Nothing like quality cinema. Thanks, But i meant it as one of those movie quotes that fits well with a lot of situations. Sort of like the grandaddy of them all and one that especially holds true today , "Were gonna need a bigger boat"
"The chart below should provide some comfort in that regard."
By that argument if my annual salary is $112,000 and I consistantly borrow $100,000 every year, I should be good, right?
If you use that 100k to buy gold and silver, than yes you should be fine ;)
Don't you know that the goobermint and banksta elites don't have to live in a world of ration and math?
Pointing out mathematical facts is terroristic.
Say 2+2=5 or we will attach a caged rat to your face.
Pointing out mathematical facts is terroristic.
YES! They are "undermining the legitimacy of our national currency."
The local SWAT team will descend upon them momentarily.
Book 'em Danno. Math 1...
"How many fingers, Winston ?"
"There are two things I can't stand; people who are intolerant of other people's culture, and the Dutch!"
They probably need to check your kids lunchbox for a Federally approved meal and GOOOOLLLLLDDD to have a really solid case. Chuck Norris lunchbox with NRA sticker = extra year in the FEMA camp.
Dutch bastards!
"Say 2+2=5 or we will attach a caged rat to your face"
Holy Shit! Quote of the day. LMAO!!!
If you make 100$ and spend 150$ every month since decades, I don't think you can call it living on a budget....
More like "a sucker is born every day and they buy US bonds...."
i'm still trying to figure out who "they" are. In some ways i've been trying to find this out since "forever" since as long as i can remember i've always been told...."they"....are here. Anywho "this really isn't all that big a deal so long as food prices double or triple from here." MOVE ALONG CITY PEOPLE! MOVE ALONG!
On a long enough timeline....
US dollars will be worthless...
The Ben S. Bernank, per his masters' orders, shouts down the well:
You must not have read the article. As Tyler clearly pointed out, this is the "final debt ceiling". The dollar will not go any lower after the final 700 Billion or so in borrowing. Once they hit 16.4 Trillion, they are going to go into debt rehab and go cold turkey on the borrowing. Maybe it'll even make it onto an episode of "Maxed Out" or "Till Debt Do Us Part".
As US Debt Hits New Record, Fiscal 2012 Tax Revenues Are 10% Higher Than Debt IssuanceBy golly, that's change I can believe in. That headline can be tweaked into a nice campaign slogan!
My fault...we paid our taxes early this year because my money is worth nothing...and because of some rule in the tax code that states if make x-amount more this year than last year and do not pay before April 15th you can be hit with a penalty because you didn't take "enough out" during the course of the year...
Looks bullish, we can cover this debt easy with taxes
Verizon ( Caugh barff Bloody--- pool.
Graph ends in 1997. Is there an updated version somewhere?
No, the graph ends 97 days into the new fiscal that started on 10/31/11. We are now 108 into the new fiscal by my rough calculation.
98 tax days
Ah thank you!
Don't you know it's 1983?
Obama is the new Reagan; green shoots and mustard seeds, it's halftime, buy a Chrysler and some AAPL and you will see the years 1997-2022 and the national debt go to zero, I promise. BTW, my name is Mudd, Harry Mudd.
http://img.trekmovie.com/images/Mudd_Big.jpg
Hey!
My name is Mudd! But call me Aloycius Devadander Abercrombie, that's long for Mudd.
So I've been told....
Obama is just saying this (a trillion more) now ... so in November he can crow about how he kept down the debt. Take the lump now while his approval is rising so he can score big later when it counts. It's all a circus and he is the current ringmaster.
If nothing else this article confirms why we have ZIRP for ever and ever. <imho>
'unlikely to ever decline back to double digits Again, with familiarity, this will become the new norm. "Oh, only 122%? Well Spain is 180 and Japan is 300 so we're doing fine". It's akin to the change in thought and talk of millions into billions into trillions until folks begin talking about trillions like they were millions. "A trillion dollar deficit? That's nice."
I hate to say it but 90% of Americans could not tell you how many zeroes are in a trillion.
just the one. But you said 0 not O. What was the question?
so, money printed out of thin air, is tax revenued back in real money! nah, i see nothing wrong here!
The point is, ladies and gentleman, that debt, for lack of a better word, is good. Debt is right, debt works. Debt clarifies, cuts through, and captures the essence of the evolutionary spirit. Debt, in all of its forms; debt for life, for money, for love, knowledge has marked the upward surge of mankind. And debt, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA. Thank you very much.
<golf clap>
Sarcasm? Or have you tapped into the "ignorance is bliss" node of the Matrix?
Gordon Gekko speech from "Wallstreet", repurposed.
I see it now...thanks...must...watch...that...movie...
Good one Bob.
1 Bernankeans 13:13
And now abideth faith, hope, and debt, these three; but the greatest of these is debt
what, federal employees started paying back their back taxes?
Producer on "Fast Money" squelching risk talk by Keith McCullough of Hedgeye.
McCullough warned that S&P was toppy, markets are expecting continued growth and no recession/depression in Europe and overestimating the good news.
Melissa Lee breaks in: "O.K. guys, let's move on...we could talk all night but let's get back to trading, MSFT at all-time highs..."
Dylan Ratigan would have engaged in that discussion for ten minutes and mentioned the skullduggery of Wall Street, which is why they got rid of him and Macke and substituted market pumpers who are "agnostic". McCullough must just be a guest.
"Amazing day in the markets, looks like things are getting better..."
LOL...go market go...ignore that brick wall of European Depression and the U.S. data fudging ice patch...pedal to the metal...buy, buy, buy...P/E's at generational lows (like employment)...go for high yield (kind of like food stamp participation)...it's 1983 all over again! (except it isn't, but...).
Debt? Debt is credit, credit is capital, capital creates jobs, jobs create money, and there is plenty of money, right?
*cough*
As of this post at 5:16 PM (Eastern):
Dated Brent Spot = $121.62
Nymex Crude Future = $102.28
WTI Cushing Spot = $102.31
http://www.bloomberg.com/energy/
Nothing says recovery like stubbornly high oil prices... even though oil consumption in the US is markedly lower than one year ago...
100% FUBAR.
Let's all hope Sky Masterson don't roll snake eyes. LUCK BE A LADY TONIIIIIIGHT.......
Man, people are still talking about this pretend shit?
Welcome to the party ( etch A sketch)
So everything is ok lets borrow a bit more to converge those 2 lines.
Tangentially related:
http://biggovernment.com/whall/2012/01/29/obama-administration-offers-75...
That's right. The government WANTS you to be on food stamps now. We already have a record number of individuals on food stamps so, of course, we need to pay out $75,000 taxpayer-funded grants to non-profits so that they convince people to overcome their pride (can't have that in the good ole U.S. of A, now can we?) and sign up more.
Oh, and don't you dare call Obama a "food stamp President." Everyone knows that's a thinly-veiled racial attack (err, don't ask why, explaining why it is would be racist in itself) and has nothing to do with Obama's economic policies.
Sigh ... We've become a centrally planned economy and most Americans not only don't seem to care, but have embraced it with open arms. As long as they get their government cheese to eat and they get to zone out of reality by watching the cheese on TV, they're fine.
So I make 50K a year at he same time I borrow 50k so is there something missing here? Oh no, I just spend 100K and feels good.
What's all the excitement about?
Things are fine here. I'm going out the door and catch a few waves with my oldman's body and then take a nap.
I don't really understand what all of this about.
My nephew the surfer says he will bring a board when he comes and teach me to surf. Now this is exciting! I hope he gets here before my checks quit coming-----
om
slewienomics indicates a "doTheMath" CFA as follows
[cash in] $677.6 Bil + [debt] $601.0 B = $1,278.6 B = spending [+ refi, ?] = cash out, BiCheZ!
Hey, just like my bank account balance:
[savings] $8,032 + [credit card debt] $7,068 = $15,000 + $12,032 [credit line remaining] = $27,032! = shopping!
It's utterly unfortunate that the US has got to this point. A question though: why the comparison with the WTH component of tax revenues only? What is the status of the relationship between the annual tax revenues for 2011 and the total debt issuance for the same period?
"why not just do away with taxes entirely and have all US capital needs be debt funded?"
Better yet, why not follow the Greenbackers and fund all government expenditures with printed money?
We are already doing that, in part, running $trillion+ budget deficits every year and funding it with QE.
This is utter drivel.
Much ado over nothing.
Stay unemployed long enough the revenue becomes zero.
http://hat4uk.wordpress.com/2012/02/16/greek-default-exclusive-senior-us-bankers-given-explicit-timetable-for-athens-default/
Do JP Morgan, Barclays, Commerzbank and Deutsche Bank all possess a document with an explicit timeline for a Greek default on March 23rd?
They don't need your money they just need your vote.
Soon they will not even need that.
Just as they have taken the
burden of higher taxes off the shoulders of the American citizen,
They will take the burden of deciding between a democrat progressive commie or a republican progressive facist
It's so hard to decide especially for people who can no longer brown bag a turkey sandwich.
But they may out fox themselves.
The progressive republicans fear Ron Paul.
The progressive dems think he would surely lose to the
Prancing Prince Obama.
So the dems are actually trying to get Ron on the ticket,
So the magnificent matador can deliver the coup de grace
Skewer the old goat mumbling about the old relic the constitution.
But if the anti sex Santorum, falls then watch the press elevate Ron
Some how
And then the October surprise that will go down in History.
Ron Paul.
Wow. I'd love to see that one.
I'm actually expecting a brokered convention where Cristie reluctantly accepts the nomination. I would prefer Paul of course.
Tyler you have to read John Locke's definition of money. And the quaint philosophy behind it.
A philosphy that spurred the founding fathers to attempt the impossible.
Create a nation of free men who do not owe their sustainability to the King.
Never done before, and imitated poorly.
Go to the book " The biblical politics of john Locke"
By Kim Ian Parker. Page 137
Revolutionary
You see we don't have a philosphy
Poor us.
MDB.... Come out. I am awaiting your comments !