Federal tax revenue plunged $138 billion, or 34%, in April vs. a year ago — the biggest April drop since 1981, a study released Tuesday by the American Institute for Economic Research says.
For example, 6 million people lost jobs in the 12 months ended in April — and that means far fewer dollars from income taxes. Income tax revenue dropped 44% from a year ago.
“These are staggering numbers,” Lynch says.
Big revenue losses mean that the U.S. budget deficit may be larger than predicted this year and in future years.
Poop – meet fan. That’s right – it has hit the fan and while Obama should now be covered in it – he is turning the fan around so what taxpayers are left will be the one’s getting covered in the poop.
The other deficit driver is government spending, which, the AIER’s report says, is the main culprit for the federal budget deficit.
The White House thinks that tax revenue will increase in 2011, thanks in part to the stimulus package, says the report from AIER, an independent economic research institute. But it warns, “Even if that does happen, the administration also projects that government spending will be so much higher each year that large deficits will continue, and the national debt held by the public will double over the next 10 years.”
It’s official – Obama is making the worst financial crisis since the depression – even worse. Obama’s legacy will be one of debt and financial misery.
The government may have a hard time trimming spending to reduce the deficit when the recession ends. The 77 million Baby Boomers— those born in 1946 through 1964 — will start tapping their federal retirement benefits soon, which means increased government outlays for Social Security and Medicare.
The Boomers now are in their 50s and 60s and unlikely to keep increasing incomes for long, which means that revenue from income taxes could flatten in the next few years. Also, Lonski says, they are more likely to save for retirement than spend — and consumer spending is a big driver of the economy.
“The American consumer led us out of previous recessions with some semblance of gusto,” Lonski says. “They’re too old to do it now.”
These boomer’s are the one’s that are out front and vocal in their opposition against National Health Care. It is not a struggle between Republican & Democrat, Rich & Poor, it is now the old against the young. Most people in their 60’s are more worried about their well being than buying a new 60″ LCD HDTV. The consumer buying binge is over. The only way the American economy will ever recover is for the Federal Government to quit spending and for free enterprise to be unshackled. However, it may be too late. I just wonder when the point comes that all of America realizes that they are on the Titanic and history will repeat itself?