Wendy McElroy sounds the alarm on what's to come (like Peter Schiff did the other day on CNBC - watch part 1, 2):
Tax receipts in America are plunging at every level of government: federal, state and local. Even in April, when income taxes were due and money flooded in, there was a federal deficit of $20.9 billion. Otherwise stated, federal tax receipts in April were down 44% compared to 2008 -- the first deficit for that tax-paying month in 26 years.
EverBank’s Daily Pfennig (06/04/09) commented, “In April when taxes are paid, we recorded a deficit?….I also read where the money collected by taxes is only going to cover half of the fiscal 2009 federal budget, requiring the government to borrow and print more than $1.8 Trillion to fund it. And that's not the end of it... There are equal-sized deficits looming for fiscal year 2010 onward. (Read entitlement programs) Tax receipts fell 50% during the Great Depression. Now eight months old, this depression is already rivaling that drop!”
Many states are in even worse shape because, unlike the feds, they are legally required to balance their budgets each year. California, for example, is careening toward what some call a “financial apocalypse”; with President Obama meting out ‘tough love’ by refusing to toss a penny its way, California may be bankrupt in July.
The Daily Pfenning concluded, “Do I have to tell you what's next for Jean and Joan and who knows who? Higher taxes! You won't hear the lawmakers running around screaming that they need to cut government spending! Instead, you'll hear them screaming that they need to increase revenue! HEY! Cut the spending Jack!”
True to prediction, governments are riding a sugar-high of spending.
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