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Feds Collect Record Taxes in First Month Under Tax Cut; Run Surplus in January

Discussion in 'American Politics' started by NightHawkeye, Feb 13, 2018.

  1. NightHawkeye

    NightHawkeye Work-in-progress Supporter

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    From the "We'll see if this continues", files: Feds Collect Record Taxes in First Month Under Tax Cut; Run Surplus in January

    During January, the Treasury collected approximately $361,038,000,000 in total tax revenues and spent a total of approximately $311,802,000,000 to run a surplus of approximately $49,236,000,000.
    ...
    Despite the monthly surplus of $49,236,000,000, the federal government is still running a deficit of approximately $175,718,000,000 for fiscal year 2018. That is because the government entered the month with a deficit of approximately $224,955,000,000.
     
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  2. miamited

    miamited Ted Supporter

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    Hi NH,

    That's a good thing. However, if Donald Trump's budget proposals are adopted, we're going to need that little extra money and a whole lot more. Let's wait and see where we stand at the end of the FY.

    I'd be interested in seeing how much of that collected tax was from business returns and how much from personal income tax filings and compare those numbers year on year.

    God bless,
    In Christ, ted
     
  3. miamited

    miamited Ted Supporter

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    Hi again NH,

    Oddly enough, the only source that seems to be reporting this news is an agency called CNS News. I just question the veracity of the account because the CBO makes the claim that for the first four months of the current FY income was up 4% but expenses were up 5%. As of January 2018 the year over year deficit grew by $16 billion. So, making more money isn't going to help us much if our expenses are up an even greater percentage: Monthly Budget Review for January 2018

    As I say, I'd like to see the numbers at the end of the year. According to the U.S. Treasury, tax receipts were also up in October by $14 billion. The receipts more than doubled for November and December year over year. $236 billion increase and $343 billion respectively. So, looking at the recent historical receipts year over year, January doesn't look nearly as good as the previous 3 months under the old tax scheme. So it could be, that while revenues are up year over year, they have been for quite some time and January took a precipitous nosedive in the amount of the increase. Could this be because of the new tax laws that went into effect in January? I don't know, but it's worth looking into.

    Source: Monthly Treasury Statement

    So, before we start cherry picking numbers, let's look at what those numbers really tell us.

    God bless,
    In Christ, ted
     
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  4. AirPo

    AirPo with a Touch of Grey

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    Is CNS news a Russian bot? Just asking a question.
     
  5. NightHawkeye

    NightHawkeye Work-in-progress Supporter

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    Already verified.

    CNS links to the Treasury's own report. The bottom of page 2 shows the entry for January 2018 with a surplus: https://www.fiscal.treasury.gov/fsreports/rpt/mthTreasStmt/mts0118.pdf

    ... and yes, the government is still very much in arrears (not to mention the $20+ trillion debt). Still, one month with a surplus is better than no months.
     
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  6. miamited

    miamited Ted Supporter

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    Hi NH,

    Right. I linked the treasury information and I'm not denying that the January receipts aren't up year over year. My question in this post was about why it's so much less 'up' than the previous months of this FY. Now, it could be that January increases are pretty much always lower, but then, it might be that it's down, as to the percentage of increase, because of the new tax overhaul. As the treasury report shows, November and December tax revenue receipts more than doubled year over year. Now, all of the sudden, the revenues are only up $11 million. What happened and why?

    January 2017 was up $30 million over January 2016. So, the fact is that looking at January vs. January, the increase in 2017 was greater than the increase in 2018. Not particularly good news.

    God bless you,
    In Christ, ted
     
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  7. Halbhh

    Halbhh The wonder and awe of His Creation! Supporter

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    The numbers: The U.S. government had a monthly budget surplus of $49 billion in January, down slightly from the same month last year.
    ...
    Receipts were up 5% more in January than last year, and withholding of individual income and payroll taxes was larger than usual since this January had one more business day than last year, CBO said.

    Big picture: The latest budget figures arrived the same day President Donald Trump unveiled his fiscal 2019 budget proposal. The budget projects a deficit of nearly $1 trillion in the next fiscal year, and a near-doubling of shortfalls over the next decade.

    -- Marketwatch U.S. runs January budget surplus of $49 billion, Treasury says

    We see a Janurary suprlus is normal.

    And also, that this Janurary had one more business day, meaning one more day of taxes than last year. e.g. 23 days/22 days = +4.5% just from the extra day
     
  8. miamited

    miamited Ted Supporter

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    Hi halbhh,

    However, just to be clear, budget surpluses, or lack thereof, are not necessarily tied to monthly revenue. We can have a budget surplus in any given month even if revenue collection is down just because we paid fewer bills that came due that month. I think, for the purposes of this thread, we should stick to weighing revenue against revenue.

    Sadly for us, many of the things that Donald Trump has been touting as the great and marvelous signs of his presidency are beginning to fall away. The stock market, that he's been regularly telling us is such a great sign of his success at running the 'business' of America, has just experienced it's biggest pull back in quite a few years. All of the growth that he crowed about shortly after the passing of the recent tax bill have been completely stripped away and then some. Today we don't hear him talking so much about the great and marvelous stock market under his direction. I imagine that he's hoping that no one will give him the credit for the pullback so much as he wanted everyone to give him the credit for the recent increases.

    It's going to be interesting to see what the financial situation of our country is a year or two down the road. President Obama gave us larger debt, but it was to pull the nation out of the greatest financial crisis at least since the great depression. Donald Trump may give us larger debt without much gain for the people. He wants to spend billions and possibly trillions on his wall and billions more on military, but he's gutting some of the programs that benefit our people in order to do so. Personally, I don't see that as a particularly good reason to increase our debt.

    He (Trump) took over a nation that was humming along and was already a great nation and business had been doing pretty well for the last 7 years or so. It would just seem to me that he ought to be able to run the country without increasing our debt so much because of the good position that the country was in when he took over.

    Even his infrastructure proposal, while I'm all for improving and repairing our infrastructure, lays most of the cost of such on state and local governments. At least that's what I read in a recent report on his budget proposal. The report claimed that his infrastructure proposal was to provide more matching money overall, but requiring states and local governments to come up with a bigger percentage of the cost. He wants to cut back a lot of the social programs. So, it would appear that we're going to build up our military, but at what cost to our people? Is having a mightier military, which is already the largest and strongest in the world, more important than providing for our people with the tax revenues that the government collects? Are we, as a nation, really that war bent that we'd cut so many of the programs that help out the least of us, just to be able to thump our chest at the rest of the world concerning our military power? Where do our human values really rest?

    God bless you,
    In Christ, ted
     
  9. miamited

    miamited Ted Supporter

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  10. NightHawkeye

    NightHawkeye Work-in-progress Supporter

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    Fannie & Freddie ... two hopelessly corrupted government entities which need to be dissolved.
     
  11. miamited

    miamited Ted Supporter

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    Hi NH,

    I'd have to do more study to see what kind of impact the dissolution of these two major players in our mortgage process would have for the individual borrower, but...

    They are there. They hold some interest in nearly every mortgage in the country. That's fine if we can come up with an alternative, but we have to deal with the here and now. Right now fannie and freddie hold some securing interest in about 90% of the mortgages being made. If they go, then rates will go up. Most likely housing prices would go down because the increased rates would mean fewer qualified buyers for homes.

    Source: What you need to know if Fannie and Freddie go

    It's worth noting in this article that it is claimed that since the great housing market collapse, the two agencies have paid me and you $132 billion (this report is dated 2013 and so that $132 billion was paid in just two years) That's the dividend return that they have paid to the federal government since the collapse. Should that continue, then over the next couple of years, from this report, they will have each paid back all the money that the government shelled out to them during the collapse and will likely have already paid the government at least the $5.1 billion that we might give them this year. While that's certainly a long term return, it also means that they don't really bleed the government dry. As an investment for the government it may not be as good as it can be, but it isn't costing the government over the long haul. Here's another article which gives a better picture of the more current situation.

    Fannie Mae to pay Treasury $5.5 billion after profit doubles

    So, let's be careful what we wish for. According to this article, they each paid the government well over the $5.1 billion in 2017 that they are now asking for to remain solvent. According to some sources, part of the reason for their fall in equity is due to a change in how the government allows them to keep assets and capital on their books. Basically, they're being required to not keep assets and capital from year to year. This means that when things go south temporarily, then they have to go to the government to get back some working capital.

    Anyway, I'm not fully knowledgeable on the situation and perhaps others will put in some better understanding, but according to these articles, which are not new reports, Fannie and Freddie have been an overall gainer for the federal government. Yes, the federal government gave them $116 billion during the collapse (some reports say $180 billion), but year after year in the long term picture, they have paid the treasury a lot more than they have cost the treasury.

    BTW, the second article came from Fox which has long been a big supporter of the present administration. So they're showing this glowing report of Fannie and Freddie's dividend payments to the federal treasury should look good to the Trumpites. From where I'm sitting, it looks like the federal government may be cutting it's nose off to spite it's face if it were to dissolve the two companies. Not to mention the problems such a move could cause home buyers.

    God bless,
    In Christ, ted
     
  12. NightHawkeye

    NightHawkeye Work-in-progress Supporter

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    I know. Their dissolution needs to be systematic.

    Fannie and Freddie were largely responsible for the housing crash a decade back. They still hold too much control over the housing market and need to be down-sized. Perhaps there's a place for them, but I doubt it. History has already shown with Fannie and Freddie that when the government gets into such operations it stops at little short of total control ... and then unsuccessfully attempts to defy the innate laws of economics.
     
  13. hislegacy

    hislegacy This is me.

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    More good news!
     
  14. miamited

    miamited Ted Supporter

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    Hi NH,

    I'm not sure that Freddie and Fannie were responsible for the market crash. They were forced to loosen the underwriting regulations.

    • the law mandating lending to increase homeownership allowed both Fannie and Freddie "to fall short of meeting housing goals that were `infeasible` or that would affect the companies' safety and soundness", and that the GSE's availed themselves of that loophole when they felt the need to; and that
    • The Commission found GSE loans had a delinquency rate of 6.2% in 2008 versus 28.3% for non-GSE or private label loans. Taking the roughly 25 million mortgages outstanding at the end of each year from 2006 through 2009 and subdividing them into 500+ subgroups according to characteristics like credit scores, down payment and mortgage size, mortgage purchaser/guaranteer, etc., the Commission found the average rate of serious delinquencies much lower among loans purchased or guaranteed by government sponsored organizations such as the FHA, Fannie Mae and Freddie Mac, than among non-prime loans sold into "private label" securitization.
    According to this source, the government purchased loans were actually much stronger than the private market loans. This source says that some 28% of private loans were in default while only 6% or government backed loans were. It could just be that you're accusation isn't really the truth of the matter. Fannie and Freddie are private corporations but they are backed by the federal government as far as losses. Hence they are referred to in this article not as government entities, but as government sponsored entities.

    God bless,
    In Christ, ted
     
  15. NightHawkeye

    NightHawkeye Work-in-progress Supporter

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    That's the thing though, Ted, like so many of things government attempts to do ... power was consolidated to control the free market ... and it was then deliberately abused.

    Government power over such things needs to be limited. The market goes up and down naturally without government involvement ... but with massive government control the swings become both radical and unnatural.
     
  16. cow451

    cow451 Individual-2 Supporter

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    Comrade News Service ?:ebil:
     
  17. miamited

    miamited Ted Supporter

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    Hi NH,

    I hear your complaint and I agree to a point that government involvement can be troublesome in some situations. However, I'm just clarifying your position in which you blame Fannie and Freddie for the collapse. I think when you get to the very bottom of the reason for the collapse you'll find a lot of greedy financiers. Investors who wanted more and more money from mortgage backed investments and lobbied to loosen the controls that regulated who could obtain one. As my last post seems to make clear, it wasn't the government backed mortgages that failed as much as the private bank underwritten mortgages.

    Here's another article that points out that one of the largest parts of the collapse was private institutions trying to take market share away from Fannie and Freddie. That it is was actually congress, as I briefly mentioned before, that continued to push Fannie and Freddie into a greater risk position. I'm certainly not trying to say that Fannie and Freddie didn't have a large part in the collapse, but I don't believe that they were the biggest piece of the puzzle. As is also mentioned in the article, the U.S. treasury, through dividend payments, have recouped much more from both Fannie and Freddie than they ever put in to bring them back to reasonable solvency. Now congress is trying to make things tougher for Fannie and Freddie by severely limiting their ability to hold assets and capital that would protect them from short term default.

    Also as the article mentions, Fannie and Freddie were first conceived in an effort to put more money into the mortgage market so that more and more Americans could achieve the American dream of home ownership. They have consistently done that by freeing up the money that private banks lend for mortgages. So, we can get rid of Fannie and Freddie, but then you're going to leave banks holding all their own mortgages and there won't be as much money to lend out for mortgages.

    This will, as simple supply and demand economics shows, raise mortgage interest rates. Banks will want to get the most bang for their buck since they would now have to hold their mortgage securities for the full 10-15-30 years of the life of a mortgage. What a bank would lend you today, since it will be their money out there for the life of the mortgage, won't be available for the next guy. So, as with most everything, there are pros and cons to the system. One of the pros is that more people can own homes with affordable mortgage rates. One of the cons is that all that mortgage debt that is out there is going to be held by one centralized company. As long as everyone pays their bills, the con isn't particularly troublesome. But, even as we saw in this latest downturn, because Fannie and Freddie do make money on their mortgage securities, when things turn around they can pay back their loan from the federal government.

    It might be well worth considering that if individual banks had held all of their own mortgages, which is what will happen if Freddie and Fannie disappear, then the crash likely would have caused a lot more banks to close their doors. Guess who foots the bill if banks go under? Under the FDIC program...you would. When a large bank closes up shop due to insolvency, all their deposits that are guaranteed under the FDIC program, are paid by the federal treasury which supports the FDIC.

    So, even if Fannie and Freddie hadn't existed in 2008, you'd still have had to foot the bill for failed banks. The federal treasury would still have had to make massive loans to keep banks afloat. With Fannie and Freddie, at least the government is able to make the rules as to how they will get paid back. If the government had to loan out those same boatloads of cash to 500 different banks, there's no guarantee that they would have recouped the money and surely not as quickly.

    While so many people decry that the federal government bailed out a bunch of banks and large corporations in this latest crash, the facts after the event was over show that the federal government got pretty much all of the money it had spent and then some in the dividend and stocks that were issued for the loans. However, the real reason our debt remains so high is that instead of using the repayment money to retire the debt, the federal government just absorbed it back into liquid funds of the treasury and went on a big spending spree. So, instead of the government, when they got the money back, going out and repurchasing a lot of the bond debt that the crisis created, they just left the bonds out there as continued debt while they took the repayment money and spent it elsewhere.

    All I'm asking is that we be fair and somewhat knowledgeable about the cause and effect of the mortgage crisis and the continued national debt that we have. While Fannie and Freddie are certainly not without blame in all of this, their's isn't the lion's share of the problem.

    Now, I'm no financial wizard and I welcome anyone to correct anything I've written here. But in the smattering of research that I've done, this is what I've gleaned, now that the crisis is over, with why the crisis came about and why our debt is still so high despite the governments claim that they've recouped more than they paid out. So far as I know, there has been no debt retirement from the monies received from any of the repayment.

    Source: Fannie Mae, Freddie Mac And The Credit Crisis Of 2008
    The Real Plan to Pay Off the Debt (this is an old article and so the numbers don't reflect what we see today, but the plan is the same)

    If we really want American independence from foreign nations, I'd vote for forgetting about oil and try to stop selling them our debt.

    God bless,
    In Christ, ted
     
  18. NightHawkeye

    NightHawkeye Work-in-progress Supporter

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    I understand that is how the collapse was portrayed by Democrats. The truth though is that government interference attempted to re-write the laws of economics by giving home loans to large groups of people who never should have qualified ... ever. A good deed is teaching a person how to manage finances ... or improve their skills ... not putting them in a situation so far beyond their means that a day of reckoning is soon at hand.

    The government forced lenders to give loans to people who wouldn't have qualified under any reasonable assessment of their circumstances. Free money, right? What could possibly go wrong? The lenders really had little choice but to bundle loans together. Buyers of home mortgages had little interest in purchasing bad debt. I mean, would you willingly buy mortgages which were likely to default? Most people and most companies wouldn't. To be able to make loans that could be sold at all, the lenders learned to repackage the good debt with the bad. It was a shell game of sorts ... which need not have happened. It did not end well.
     
  19. mark46

    mark46 Well-Known Member Supporter

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    If Oct 2017 - Sept 2018 deficits go down, it will be a major win for Republicans and would likely affect a number of house seats. I wouldn't hold my breath waiting.
    ======
    BTW, we did understand that the one time gift for bring money home from Europe was going to generate revenue. Apple wanted to pay up fast before Trump changed his mind
     
  20. miamited

    miamited Ted Supporter

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    Hi NH,

    You responded:
    That's just bad faith double speak for I don't like Democrats. So far, all that I've presented are reasonable arguments by sources that have no political affiliation. I can't imagine that the CBO is a Democratically held stronghold. I don't think Investopedia has any particular party affiliation.

    Then you wrote:
    Even your own argument isn't being made against Fannie or Freddie, but the legislature. Nobody will argue, at least not myself, that there was an attitude within certain parts of the government that were bending over backwards to make home loans to people who probably shouldn't have gotten them. But again, that wasn't Freddie or Fannies decision. As a private enterprise under government authority, they were just following the rules that the government laid out for them. Again, as my earlier evidence pointed out, it was actually the private mortgage market that pushed for the more lax regulations so that they could compete for mortgage money that Fannie and Freddy didn't want. That's why the private sector mortgage default was about 20% higher than the Fannie and Freddie defaults. Yes, once all the dominoes started falling, everybody in the mortgage business got caught in the fall.

    You then continued:
    Here again you're just saying the same thing twice. Here's a piece on some of the causes that have been given for the crisis.

    Among the important catalysts of the subprime crisis were the influx of money from the private sector, the banks entering into the mortgage bond market, government policies aimed at expanding homeownership, speculation by many home buyers, and the predatory lending practices of the mortgage lenders, specifically the adjustable-rate mortgage, 2–28 loan, that mortgage lenders sold directly or indirectly via mortgage brokers.[41] On Wall Street and in the financial industry, moral hazard lay at the core of many of the causes.

    As this piece ends up saying, "Oh Wall Street and in the financial industry, moral hazard, (read that as greed) lay at the core of many of the causes.

    You make the point, "Buyers of home mortgages had little interest in purchasing bad debt. I mean, would you willingly buy mortgages which were likely to default?" Credit ratings agencies had a hand in that failure. Greedy investors had a hand in that failure. Bundled mortgages were given a better rating than they should have been give and there was even a lawsuit brought against those agencies for their rating practices. Investors, admittedly some not the brightest bulbs in the box, looked at the higher return rates offered for them if all went well and took the risk. Even today, a business that isn't particularly profitable or well run can offer bonds with a higher than average interest rate and people will buy them. Even though their brokers will tell them that such bonds carry a higher risk of default.

    But again, none of this has much of anything to do with Fannie and Freddie.

    Now, you can be against Democrats all you want. That's your right. Personally, I'm not tied to any political party and I never cast my vote based on the political party affiliation. My vote goes to the person that I trust the most to do the best job, whether that individual is a Republican, Democrat, Independent or any other political party. I rarely attack the party, but the person. Just as I made the comment before about 'Trumpites'. I don't see them as necessarily Republican, although many of them are. I know that there are some Republicans who aren't particularly happy with our present administration. So for me, it isn't about Republican or Democrat, but rather the person. So, I don't cast my disparaging remarks on the party, but rather on the people who support the person. I'm wise enough to know that not all Republicans feel the same way about everything and neither do all Democrats feel the same way about things. They are merely party choices and generally, if one wants to vote, then they have to make some claim to be Republican or Democrat or Independent.

    Sadly, our nation has built now this wall of separation based solely on someone's party affiliation. I don't feel that strongly about my politics as to have some sort of allegiance to a party. I try to look for the truth and the best person that I feel will do the job that they are running for. If this year that person is a Republican, then in the final election I'll vote for them. If in the next year it's a Democrat, then I'll vote for them. If it's a Republican in this race and a Democrat in that one, then I'll gladly split my voting ticket.

    God bless you,
    In Christ, ted
     
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