usmbguest5318
Gold Member
...The nonpartisan Congressional Budget Office announced that the federal government will run out of money even sooner than expected, thanks to the new tax legislation. Bloomberg notes that the Treasury Department will soon have no more "accounting moves" -- read "cook the books" -- to prevent default in the first half of March. CBO had previously said a debt default could be held off until late March or early April. A key reason for the change is the implementation of December’s tax overhaul through new withholding tables in February, CBO said.
Because the tax legislation reduced individual income taxes for most taxpayers, the Internal Revenue Service released new income tax withholding tables for employers to use beginning no later than the middle of February 2018. As a result of those changes, CBO now estimates that, starting in February, withheld amounts of individual income taxes will be roughly $10 billion to $15 billion per month less than anticipated before the new law was enacted. Consequently, withheld receipts are expected to be less than the amounts paid in the comparable period last year. (Source)
A default on debts had originally been forecasted for late March or early April. But now, because of the new withholding tables, “withheld receipts are expected to be less than the amounts paid in the comparable period last year.” That, combined with the fact that the Treasury generally issues a high number of tax refunds in February and March, means that the $272 billion in cash the Department had on hand as of Tuesday will quickly dwindle.
This is very likely to come to a head this week, and you can be sure that Republicans will be squirmin' like a worm in hot ashes to trying to convince everyone that Federal Government's running out of money sooner than expected somehow is the Democrats' fault. That even as it was they who rode the tax cuts hard and put 'em up wet.
Sure as "you" didn't notice, financial markets and investors most certainly have noticed.
The Treasury bill market is starting to show apprehension about when the government might exhaust its borrowing authority, with signs of stress emerging in securities due early March. Investors are now demanding a bigger premium to hold early March debt, putting a kink in the usually upward-sloping T-bills curve.
The thing about the upcoming debt ceiling limit's arrival is that there's no way around the fact that Senate Democrats got politically out maneuvered when they accepted McConnell's three week deal because McConnell knew damn well that the debt ceiling would hit its limit right around the time the CR they passed would expire. While holding their ground on the DACA matter three weeks ago would have been very painful, it would have also been survivable.
David Popp, a spokesman for Senate Majority Leader Mitch McConnell of Kentucky, declined to comment on whether the debt ceiling would be part of the next short-term government funding bill.
Sh*t fuzzy! "You" know damn well that it will be! And "you" know what the line will be: The Democrats are putting the U.S. credit rating at risk and that's going to cost "however much" and cause a selloff of U.S. securities and cash and reduce our leverage and reduce the prevalence of the dollar as the world's foremost currency for exchange, and so on and so on....
Be all that as it may -- we'll see if it plays out that way, but I'm not holding my breath -- what's clear in any case is that this is the first time in a long time we've actually had the political party in complete power (both houses of Congress and the WH) create or allow to persist one financial crisis after another. That is so not how things are supposed to be. I mean really! Who the hell creates havoc in their own household? Trump submitted a budget to Congress, yet Congress hasn't even come close to passing it or an amended form of it, so here we are CR-ing our way from one month, one budget crisis to the next.
Hell, the silliness of that reminds me of back when my firm was just a fledgling and I was "living on borrowed time" -- dipping into personal funds when I had to, calling clients to press them to pay me on time and occasionally calling creditors to tell them I'd pay, but I'd be two or three days late, all to protect my credit rating -- as I built up my renown, retained earnings, and client base. Put another way, it reminds me of folks who (for whatever reason) either (1) live well beyond their means or (2) put on airs of grandeur and then, when everything comes crashing down on them, expect the rest of us to suffer/cover for their sorry ass excesses and poor judgement and lame analysis.
Because the tax legislation reduced individual income taxes for most taxpayers, the Internal Revenue Service released new income tax withholding tables for employers to use beginning no later than the middle of February 2018. As a result of those changes, CBO now estimates that, starting in February, withheld amounts of individual income taxes will be roughly $10 billion to $15 billion per month less than anticipated before the new law was enacted. Consequently, withheld receipts are expected to be less than the amounts paid in the comparable period last year. (Source)
A default on debts had originally been forecasted for late March or early April. But now, because of the new withholding tables, “withheld receipts are expected to be less than the amounts paid in the comparable period last year.” That, combined with the fact that the Treasury generally issues a high number of tax refunds in February and March, means that the $272 billion in cash the Department had on hand as of Tuesday will quickly dwindle.
This is very likely to come to a head this week, and you can be sure that Republicans will be squirmin' like a worm in hot ashes to trying to convince everyone that Federal Government's running out of money sooner than expected somehow is the Democrats' fault. That even as it was they who rode the tax cuts hard and put 'em up wet.
Sure as "you" didn't notice, financial markets and investors most certainly have noticed.
The Treasury bill market is starting to show apprehension about when the government might exhaust its borrowing authority, with signs of stress emerging in securities due early March. Investors are now demanding a bigger premium to hold early March debt, putting a kink in the usually upward-sloping T-bills curve.
David Popp, a spokesman for Senate Majority Leader Mitch McConnell of Kentucky, declined to comment on whether the debt ceiling would be part of the next short-term government funding bill.
Sh*t fuzzy! "You" know damn well that it will be! And "you" know what the line will be: The Democrats are putting the U.S. credit rating at risk and that's going to cost "however much" and cause a selloff of U.S. securities and cash and reduce our leverage and reduce the prevalence of the dollar as the world's foremost currency for exchange, and so on and so on....
Be all that as it may -- we'll see if it plays out that way, but I'm not holding my breath -- what's clear in any case is that this is the first time in a long time we've actually had the political party in complete power (both houses of Congress and the WH) create or allow to persist one financial crisis after another. That is so not how things are supposed to be. I mean really! Who the hell creates havoc in their own household? Trump submitted a budget to Congress, yet Congress hasn't even come close to passing it or an amended form of it, so here we are CR-ing our way from one month, one budget crisis to the next.
Hell, the silliness of that reminds me of back when my firm was just a fledgling and I was "living on borrowed time" -- dipping into personal funds when I had to, calling clients to press them to pay me on time and occasionally calling creditors to tell them I'd pay, but I'd be two or three days late, all to protect my credit rating -- as I built up my renown, retained earnings, and client base. Put another way, it reminds me of folks who (for whatever reason) either (1) live well beyond their means or (2) put on airs of grandeur and then, when everything comes crashing down on them, expect the rest of us to suffer/cover for their sorry ass excesses and poor judgement and lame analysis.
