The August Congressional Budget Office budget forecast for the fiscal year that began last month says that Uncle Sam will take in $2.264 trillion from October 2009 through September 2010. That's an increase of 7.6% over fiscal 2009's intake of $2.105 trillion.
Though it won't be official until Tim Geithner's crew releases its Monthly Treasury Statement next week, it's virtually certain that the government's collections will open the year in a deep hole compared to last year, and probably well behind what CBO expects.
Take a look at this compilation of key items from October's final Daily Treasury Statement, compared to the actual results from October 2008 and 2007:
This downward spiral continues a trend that began in the summer of 2008, as the public and especially businesses, entrepreneurs, and investors began comprehending the horrid economic implications of a Barack Obama electoral victory (assumes that Oct. 2009 will come in at $135 billion; excludes 2008's stimulus payments, which the government treated incorrectly in my opinion as reductions of receipts):
In the intervening year since the election, fear and uncertainty have spread to consumers in general, which of course has significantly suppressed economic activity and federal collections resulting from it.
It is ironic to say the least that Congress and the Obama administration are glorifying the idea of a "public option" that would ultimately lead to government-run health care while Treasury receipts continue to shrink. If the private health insurance market disappears, so will its taxes.
To name just one example, Aetna's recorded income tax expense on its financial statements for 2005-2008 (including state and local taxes) averaged roughly $900 million per year. Put the company's health insurance segment out of business, and a large portion of those taxes would stop coming in, digging the country's and various states' debt holes that much deeper.
The establishment press paid very little attention to fiscal 2009's drop of 19.5% in receipts from economic activity, so I expect similar treatment of October's continuation of the trend. It would appear that they don't want any unsettling news getting in the way of the statist agenda.
If there's a reason to believe that this ongoing decline won't continue as long as the current bunch remains in charge and continues doing what they're doing, I want to know what it is.
Cross-posted at BizzyBlog.com.