Sunday, February 11, 2007

Sorry Libs, the Federal Budget is Balancing!!!

Re(1): 'Monthly Treasury Statement numbers for the first four months of FY2007'
Re(2): 'Federal Budget Slashing in Progress', Me
Re(3): 'Watching the Deficit', Me
Re(4): 'Brad and Other Libs Miss Deficit by Just 39%!!!' Me
Re(5): 'Budget Deficit Estimation' (FY2006), Me

Here comes another Monthly Treasury Statement - and, yes Randi Rhodent listeners, the Monthly Treasury Statement includes all the 'Emergency Supplimentals' for the War or whatever. Please, dear Rhodents, don't send me estimated budgets that still project a $423 Billion deficit for FY2006 - those numbers are all in and you lost...

So the MTS balance sheet will magically appear at 0900 EST on February 12 - the eighth working day after the end of the month. If you are reading this prior to that date/time Do Not Click. It ain't there. This is a premonition.

Here are the predictions:

  1. Individual Income Tax Revenue will increase (~10%)...
  2. Social Security Payroll Tax Revenue will increase (~10%)...
  3. Corporate Income Tax Revenue will increase significantly (~20%)...
  4. and, split government will limit the increase of Federal Spending to 2%
How does that affect the deficit. The spending constraint is holding - nobody can figure out how to slice up the yummy pork just sitting there on the table. The tax code changes are still resulting in a massive and reliable rate of growth in corporate income tax revenue (see earlier discussions on the dividend tax code changes). More people are working and thus paying the Social Security tax. And, wages are increasing - resulting in both individual income and social security revenue taxes increasing concurrently. So, I am adjusting the earlier chart to reflect these facets:


I think the 2% growth in Federal spending will hold this year. Even the Libs can't spend all the money allocated to their pet projects. And, the military will not be able to spend all that is thrown their way - for the second year in a row!!!

I now think we will have about 11% revenue growth in FY2007.

Please note the sweet spot in the above chart. Recent trends indicate that the Monthly Treasury Statement numbers for the running deficit first four months of FY2007 will be about 1/3rd of the total deficit - no big surprise, eh... However, posting large December/January back to back surpluses portend very good things...

My projections for a $60 Billion deficit imply a $40 Billion dollar surplus for January.
That will match with the $44 Billion surplus for December.
Good things are happening...


John in IL said...

Really enjoy your blog. I'm glad I'm not the only one who can't wait for the 8th working day of the month.

I think some people's head will actually explode if what you predict for FY 2007 comes to pass. It will be fun to watch.

LoveMyTanker said...

Good stuff! Thanks for posting this!!