December 11, 2009

Hmm — AP Report on Uncle Sam’s Monthly Budget Statement Acts As If We’re Still in a Recession

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In his coverage of Uncle Sam’s November Monthly Treasury Statement released yesterday, the Associated Press’s Martin Crutsinger reached the wire service’s usual quota of errors and misstatements. But what’s remarkable is that the AP reporter’s article seems to betray a belief that the country is still in a recession. Fascinating.

Along the way, Crutsinger omitted the fact that November’s deficit came in a bit higher than the Congressional Budget Office estimated several days ago, failed to report that receipts from corporate income taxes went negative for the second month in a row (i.e., refund checks issued exceeded cash collections), and betrayed more than a little lack of understanding of how the government has chosen to account for the Troubled Asset Relief Program (TARP).

Here are selected paragraphs from the AP report:

The federal deficit for the first two months of the new budget year is piling up faster than last year’s record imbalance.

….. The November deficit totaled $120.3 billion, the Treasury Department said Thursday. That’s less than analysts had expected and down from a $176.4 billion imbalance in October. It was a record 14th straight monthly deficit.

Even with the improvement, the deficit is 5.7 percent higher than the first two months of the 2009 budget year when it hit a record $1.42 trillion. The Obama administration expects the 2010 deficit will set a new record at $1.5 trillion.

In a sign of the recession’s depth, the government said individual income tax collections totaled $63.9 billion in November, less than the $70.5 billion the government collected in Social Security taxes and taxes for Medicare and disability insurance programs.

Analysts said it is not unusual for individual income taxes to fall sharply during a recession because the volatile category not only reflects the number of people working, but also bonuses and individual investment earnings that plunged during the downturn.

The amount of revenues that reflect Social Security and Medicare taxes, while down because fewer people are working than a year ago, are not subject to such large swings.

The flood of red ink reflects the downturn’s effect (on) the government’s books. Both individual and corporate tax receipts have been cut sharply, while government spending on unemployment benefits, food stamps and other programs surged.

In addition, the deficit reflects heavy spending from the $700 billion financial bailout fund to stabilize the financial system, and the $787 billion economic stimulus program to jump-start growth and prevent the Great Recession from turning into another Great Depression.

Here are my comments on the bolded items in order of their appearance:

  • The reported $120.3 billion deficit may be less than what “analysts” predicted, but it’s more than the $115 billion the Congressional Budget Office thought it would be in their Monthly Budget Report last week.
  • The second and third bolded items refer to the recession as if it’s still occurring, and seems to accept the idea that the third economic growth, currently pegged at an annualized 2.8% but subject to a late December revision, was as artificial as observers such as Investors Business Daily have claimed it is.
  • The item about receipts is interesting on two levels. First, nobody “cut” individual or corporate tax receipts; they just didn’t come in, and thus have fallen sharply. Second, corporate income tax receipts have fallen so much that they were negative for the second month in a row, this time by $2.1 billion. October’s and November’s combined net corporate income tax refund total is $6.6 billion. More to the overall point, if the third quarter economy was so good and we’re in the midst of a real recovery, individual income tax collections should also be in the process of recovering. But instead, they went from $61.2 billion in October to $47.9 billion in November (both months mostly do not contain estimated payments from individuals who make quarterly or periodic payments), and on a combined basis are down over 25% from November-December 2008.
  • Concerning the financial bailout fund’s effect on the deficit — Since its inception in early October 2009, the government as a whole has run a deficit of over $1.7 trillion (last year’s 1.417 trillion plus this year’s $297 billion so far). Crutsinger’s writing appears to imply that all TARP money that has been spent out of its $700 billion authorization included in the deficit. In fact, since Treasury values TARP “investments” on a Net Present Value (NPV) basis (explained in detail here earlier this year), only a relatively small percentage of all funds spent are treated as “outlays.” His last paragraph says that Treasury “now projects that the losses from the $700 billion government financial rescue fund will be $141 billion over the next decade, $200 billion lower than it forecast in August.” If Treasury has actually recognized those losses in its Monthly Treasury Statements (NPV accounting dictates that known and estimated losses should be recorded in the year they are recognized, but it’s not at all clear that it has), that $141 billion would be only about 8% of the deficits run up in the past 14 months.

But the most interesting element in Crutsinger’s work is his implicit recognition of a still-present recession. Who knew?

Image found at Fine-Tuned Finances.com.

Cross-posted at NewsBusters.org.

Short Memory: Glamour Writer Hits at Public For Being ‘Disappointed’ in Woods

Filed under: MSM Biz/Other Bias,MSM Biz/Other Ignorance — Tom @ 12:55 pm

I mean really, what right do we have to expect anything from the world’s best golfer except the world’s best golf?

That was the argument made Wednesday by “Married Jake” of Glamour Magazine at Yahoo’s “Shine” site.

The item is called “Why Is Everyone Disappointed in Tiger?” (HT Instapundit). In it, jaded Jake jabs at a substantial portion of the public because, silly us, we thought that the guy was what he and his handlers portrayed.

Here is a graphic cap of Jake’s first three paragraphs. The “Related” insert isn’t his, and seems more than a little ironic in the circumstances:

TigerWoodsGlamourJakeItem1209

Jake apparently needs to start taking more B vitamins to assist his memory, because there are at least two very good reasons why the public belief that Tiger was a faithful husband was mostly reasonable. You see, on two separate occasions, Tiger announced that he was taking time away from golf for family-related issues:

  • The less directly relevant of the two was Woods’s nine-week hiatus in 2006 from the PGA Tour to be with his ailing father who was battling prostate cancer. The April 21, 2006 Washington Post reported that “He did not give specific details of his planned break, except to say he would not start playing ‘for a while,’ and the failing health of his father, Earl, would have a major influence on his future schedule.” Earl Woods died on May 3.
  • Much more to the point, Woods specifically took time off to be with his wife Elin in June 2007 when their first child Sam was born. This decision prompted a wave of favorable media coverage (example here) with supportive opinions offered by Woods’s fellow PGA professionals.

Of course these items created the expectation that Tiger was devoted to his family. And of course, his shrewdly promoted, seemingly singular obsession with continually improving his golf game when it was already clearly the best on the planet led people to believe that he had no time for or interest in anything else besides his family (remember the commercial about him hitting practice drives during a driving rain storm, because he said — paraphrasing — “you can never take a day off”?).

Look, though I have little sympathy with the argument, you can assert that athletes aren’t supposed to be role models, and that involuntarily shouldering them with that responsibility isn’t right or fair. But this is about more than that, because Woods and his peeps for years have cultivated a public image that all of them had to recognize at some point was wildly at variance with reality.

So sue us, Jake. Yeah, we’re disappointed. We’re allowed to be. In fact, we should be. In fact, thank goodness we still are.

Cross-posted at NewsBusters.org.

Latest Pajamas Media Column (‘Repeal the Social Security Earnings Penalty’) Is Up

Filed under: Economy,Taxes & Government — Tom @ 8:58 am

It’s here.

It will go up here at BizzyBlog on Sunday morning (link won’t work until then) when the blackout expires.

This is the FDR-Era remnant that needs to be banished to the Museum of Awful Ideas:

SocSecEarningsLimitRule2009

Positivity: Fulton Sheen wanted everyone to be saints, Archbishop Dolan says at memorial Mass

Filed under: Positivity — Tom @ 5:57 am

From New York City:

Dec 11, 2009 / 04:53 am

At the Mass marking the 30th Anniversary of Archbishop Fulton Sheen’s death, Archbishop of New York Timothy Dolan thanked God for the life of the “magnetic” television and radio personality. He said Sheen’s talent and wisdom were at the service of his key goal of getting himself and the world to heaven.

In attendance at the Mass, celebrated in St. Patrick’s Cathedral in New York City, were many of Sheen’s friends and admirers who still look to him with “love and gratitude,” Archbishop Dolan said in his homily.

Bishop Daniel Jenky of Peoria, representing Sheen’s home diocese, was present as was Msgr. John Kozar, who succeeded Sheen as national director of the Society for the Propagation of the Faith.

In his homily Archbishop Dolan noted that Pope John Paul II had embraced Archbishop Sheen and praised him as “the preacher to the world” in St. Patrick’s Cathedral on October 2, 1979. Sheen himself was interred in the crypt below the main altar, beside Ven. Pierre Toussaint and the previous archbishops and bishops of New York.

“As members of a supernatural family, the Church, we gather to thank God for him, eager to swap stories about a particular episode, a witty comment, a word of advice, a particular quote, his hypnotic eyes, his soothing yet challenging voice, or an occasion when we were with him,” the archbishop’s homily began.

Archbishop Dolan recounted his own meeting with Archbishop Sheen while a seminarian in Rome. Walking through St. Peter’s Square, the seminarian saw a crowd gathered around Sheen.

Sheen told the crowd he had come from an audience with Pope Paul VI. Asked what the Pope had said to him, he “blushed a bit” and replied:

“The Holy Father looked at me, took my hand, and said, ‘Fulton Sheen, you will have a high place in heaven.’”

Someone in the crowd asked him what he said back.

According to Archbishop Dolan, Sheen replied with “that familiar sparkle and grin.”

“I replied, ‘Your Holiness, would you mind making that an infallible statement?’”

Archbishop Dolan remarked that this encounter showed the “key message” of Archbishop Sheen: “He wanted to get to heaven; he wanted to bring the world with him.”

Through his radio and TV shows, his “avalanche” of books and articles, his talks and conferences were all to help us discover the purpose of life, “eternal union with God.”

“Fulton J. Sheen wanted to get to heaven. Fulton J. Sheen wanted to bring all of us with him. Fulton J. Sheen wanted to be a saint. Fulton J. Sheen wanted us to be saints, too,” the archbishop summarized. ….

Go here for the rest of the story.