Hi,
I get a daily report from the Casey Research Group and yesterday's was a real eye opener. Basically they are saying that the federal government revenue is now not enough to cover the entitlement programs; much less all the other government costs. This is when the going is going to become very, very ugly as the taxpayers are going to be fightning the non-producing members of socitey. Very scary thought.
Following is the article courtesy of Casey Research,
regards,
5412
We really don't enjoy being a buzz-kill. It's just that we think it's more important for you to be well informed about the reality in which we find ourselves today than it is to be happy-go-lucky all the time. The good news is that when the stuff hits the fan, as it has for going on two years now, it opens up a number of unexpected opportunities for profit. Even in the hairiest situations, there are ways to protect yourself. And that's where Casey Research comes in.
More on that in a moment, now for the bad news.
If you live in the U.S., your taxes are about to get much, much, higher. And I'm not talking about the Bush tax cuts set to expire at the end of this year. I'm talking about a structural deficiency in the tax base that will force the spendthrift federal government to demand much more from the productive members of society, no matter who's in charge of Congress and the White House.
Here are the facts.
Summary of Federal Government Receipts and Outlays
Fiscal Years 2009 and 2010 by Month ($ Millions)
Receipts Outlays Surplus/(Deficit)
Fiscal Year 2009
October $164,827 $320,360 ($155,533)
November $144,769 $269,970 ($125,201)
December $237,785 $289,540 ($51,755)
January $226,090 $289,547 ($63,457)
February $87,312 $281,171 ($193,859)
March $128,924 $320,513 ($191,589)
April $266,205 $287,112 ($20,907)
May $117,217 $306,868 ($189,651)
June $215,339 $309,671 ($94,332)
July $151,480 $332,160 ($180,680)
August $145,529 $249,083 ($103,554)
September $218,880 $264,087 ($45,207)
Total Fiscal Year 2009 $2,104,357 $3,520,082 ($1,415,725)
Fiscal Year 2010
October $135,294 $311,657 ($176,363)
November $133,564 $253,851 ($120,287)
December $218,918 $310,328 ($91,410)
January $205,239 $247,873 ($42,634)
February $107,520 $328,429 ($220,909)
March $153,358 $218,745 ($65,387)
April $245,260 $327,950 ($82,690)
May $146,794 $282,721 ($135,927)
June $251,048 $319,470 ($68,422)
Fiscal Year-to-Date 2010 $1,596,995 $2,601,024 ($1,004,029)
Source: Department of the Treasury Financial Management Service
For a bit of a refresher and to update where we are, in the table above I broke down federal government receipts and outlays (revenue and expense) by month for fiscal year 2009 and year-to-date 2010.
As you can see in the table, we're through three-fourths of fiscal year 2010 and the deficit is already over $1 trillion. At this point last year, the deficit was also just above $1 trillion. So you can bet we're on track for a total deficit of between $1.4 and $1.5 trillion this year. Just like last year, the huge deficit figure will be widely reported, even in the mainstream media. But a related piece of vital information will be glossed over (if reported at all). This piece of information is the most crucial to why your taxes are set to skyrocket - and nobody is even bothering to mention it.
You see, the "outlays" column above comprises two types of spending: discretionary and mandatory. Mandatory spending, expenditures that must go into the U.S. budget, includes things like Social Security, Medicare, Medicaid, income security programs, and some others. And according to the Congressional Budget Office, mandatory spending reached $2.1 trillion in fiscal year 2009. What's more, it increased more than 30% from the year before.
Now look back up at the table above. Notice anything? Total receipts for 2009 were also $2.1 trillion. In 2009, for the first time ever, mandatory spending just about equaled total tax receipts.
That means that basically every single penny the federal government received in taxes last year (including individual income taxes, corporate income taxes, social insurance and retirement receipts, excise taxes, estate and gift taxes, customs duties, and miscellaneous receipts) was already spent on something mandatory before it came in.
It's also worth mentioning that while mandatory spending grew by 30% last year, tax receipts fell by 16%. So under the current tax structure, a gap will begin to grow where mandatory spending pulls away from total tax receipts.
What this all means is that your tax burden is sure to rise, significantly, over the coming years. That's the government's only choice at this point. You think it will cut discretionary expenses by any meaningful amount? Not hardly, it's too politically damaging. And forget about legislation to cut mandatory spending until the system goes completely bust. In the meantime, both parties will try to kick the can further down the road by extracting as much as possible from you in taxes.
Now, here's the good news.
Unlike the government, however, you do have a choice. You can "go global" and protect yourself by internationalizing your wealth through all the legal means available, making yourself a target that's not easy to hit.
