I have been sifting through government data (which is much akin to having teeth pulled) and have found some interesting statistics. I also greatly appreciate the humorous optimism that seems to pervade the budgetary process. Does anyone out there expect his/her income to increase by 8% next year, another 15% in 2011 and a further 15% in 2012? I didn’t think so. The only comparable downdrafts to the projection in declining tax receipts of -15% in 2009 were 1946 at -13%(probably do not need as much money when you are not fighting a world war) and -23% in 1931 and -38% in 1932 (50% decline in tax revenue over two years..ouch!). What makes us think that after a 15% projected slide in revenue we are going to see a big jump in 2010?
15% projected decline in receipts for 2009
What other goodies can we find in the Office of Management and Budget…. What about where the “outlays” are going? When looking at it from a % of total outlays perspective it’s interesting to see who is getting most of the kitty. I am not a huge proponent of foreign wars or massive military, but I often see the need. One can argue that the military reaches an economies of scale whereby any additional military expenditure is a waste (if you can destroy Iran, do you really need to be able to destroy it twice or three times?). So as GDP grows you would expect the amount spent on military and defense to not keep pace with the overall economy. Shouldn’t that statement also hold true for the treasury? Why have they outpaced military growth by so much?
Treasury grabbing more and more
Since we are only covering about 40% of current government expenses, where does the rest of it go? To the two other biggest budgetary problems, which when combined with the treasury and military account for 81% of all government outlays: Health and Social Security.
These two are going to hit exponential curves pretty soon
And what about the bigger picture? Well, the gap between surplus and receipts is at its widest since World War II:
A gap of nearly 13%, do they really think that is going to come screaming in?!
And lastly, how is the hole being plugged? Debt my friend. And how will the hole supposedly be plugged in the future? You, my friend and fellow citizen(also more debt, but who is counting?):
At least they had the sense to color the debt black to represent the true black hole that it is!
More to come later…
