Uncle Sam is feeling the squeeze.
The most recent U.S. Treasury Department monthly statement revealed a troubling trend.
Revenue is falling.
In the report for the period ending Feb. 28, total federal revenues came in at $3.275 trillion. This was 1.1 percent lower than the $3.31 trillion reported for the same period one year ago. It represented the biggest drop since 2008 and the third consecutive month of decline.
ZeroHedge explained why this is particularly significant.
“As the chart below shows, every time since at least 1970 when government receipts have turned negative on an annual basis, the U.S. was on the cusp of, or already in, a recession. Indicatively, the last time government receipts turned negative was in July of 2008.”
Much of the revenue decrease is due to plummeting corporate income tax receipts. This could indicate corporate America is already in a recession – at least for IRS purposes.
Individual income tax revenue came in at $611 billion, slightly higher than last year, but declining. Many analysts consider federal income tax receipts an important indicator of the state of the U.S. economy.
Declining revenues haven’t done anything to slow the roll on federal spending. The Treasury’s total take came in at $172 billion. Uncle Sam spent about $364 billion. That calculates to a deficit of $192 billion. That was larger than the $190 billion expected.
For the fiscal year through Feb. 28, the total U.S. budget deficit was $349 billion. On a 12 month run-rate, the deficit stood at 3.1 percent of GDP. That’s a major increase over a year ago when it was 2.2 percent – a third less.
To sum it up, the U.S. government is spending more and more and taking in less. This isn’t exactly what you would call a sustainable financial plan.