Just a quick reminder in case you temporarily forgot what’s actually going on in terms of the federal budget.
First, according to the Congressional Budget Office, federal receipts were down by 19.1 percent through the first seven months of FY2009. That includes a 24.3 percent decline in individual income tax receipts, a fall of 59.7 percent in corporate income tax revenues, flat social insurance receipts, and a drop pf 11.7 percent in “other” receipts.
Why? The atrocious economy. If the economy shrinks, government revenues shrink.
Second, federal spending is skyrocketing. Total outlays are up by 20.5 percent, including increases of 7.7 percent for defense, 7.7 percent for Social Security benefits, 10.2 percent for Medicare, 20.9 percent for Medicaid, and 22.3 percent of “other” programs and activities, plus TARP and GSE bailout spending.
That tallies up to a seven-month deficit of $799 billion.
Meanwhile, plans are pushed to expand government still more in the future, and to start imposing anti-growth tax and regulatory burdens on the private sector.
A grim reminder, indeed.
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
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