Monday, April 12, 2010

Did Someone Mention that the U.S. Government Has a Cash Flow Problem?

Zero Hedge reports:

Gross tax withholdings have collapsed in 2010 compared to the even disastrous 2009. Through the 14th week of the calendar year (not fiscal), cumulative tax withholdings in 2010 are $477.9 billion, $13.5 billion less than the $491.4 billion in 2009. Yet regardless of what the only organic source of revenue for the Treasury looks like, the Treasury (and IRS) are issuing ever increasing tax refunds with the abandon of a drunken sailor....A side by side comparison of weekly individual refunds indicates that as we get closer to April 15th the government is putting ever more money in the pockets of taxpayers. The week of April 9, 2010 saw 21.5% more refunds in 2010 compared to 2009.
There are two separate events going on here. In some cases, it is taxpayers filing there returns earlier to get money back earlier. In other cases it is taxpayers getting larger refunds this year versus last because of the weak economy.

An additional point to keep in mind is that the same thing is going on at state and local levels, and the state and local levels don't have the luxury of printing money when they need more cash. The world, right now, remains extremely unstable with a quake that could occur from any number of directions.

6 comments:

  1. It is revealingthat Zero Hedge describes increasing tax refunds as the government acting "with the abandon of a drunken sailor..." They make the mistake of viewing the government as if it were a business. It is not!

    The problem is not declining tax revenues to be solved by restricting tax refunds, the problem is government spending. Zero Hedge reveals itself as just another grasping statist appologist.

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  2. The financial situation will continue to decay until some responsible individuals get their hands on the levers of power. There is no revenue problem. There is a spending problem which needs to be fixed immediately.
    America is in the approximate same position that Rome was in the mid-fifth century. We all know what happened after that.
    The first step in correcting the situation is to crush the Democrat party in the November elections.
    The second step is for the newly elected congress to roll back the damage that has been done by the Obama administration.
    The third step is for the government to return to constitutional principles.
    Good luck.

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  3. LaChat

    I sympathize. But lets not forget that the collapse of the Roman empire was liberating for many people. And ultimately resulted in the Renaissance. A time of Leonardo Divinci and Michilangelo and city-states with competing governments. A concept used by US founding fathers to create a very successful balance of power which came along with the industrial revolution.

    Do you really think that Republicans will "roll back" anything? Or that government can be put back into the cage of consitutional principles? A collapse into chaos may be our only hope. Then if the constitutional principles are embraced in the hearts and minds of the people, we can begin again.

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  4. Nicholas J. KasterApril 13, 2010 at 12:16 PM

    LeChat:

    I agree with steps 1 and 3.

    I would change step 2 to read: Hold the newly elected congress's feet to the fire and give them unshirted hell if they waffle on rolling back the damage of Obama.

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  5. Kaster

    I love the term "unshirted hell" and it sounds like an excellent way to treat politicians. However, why stop at "the damage of Obama"? We need to roll back to pre Pres. Wilson at least since he gave us the despicable Federal Reserve (not to mention WWI and WWII) which is at the root of our current economic difficulty. There is much work to be done.

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  6. Nicholas J. KasterApril 13, 2010 at 7:31 PM

    Efinancial:

    No argument there. We'll start with Obama and work our way back to Grover Cleveland.

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