- by New Deal democrat
In comments to an earlier post of mine today, our very favorite troll showed up to take "Bonddad" to task for overlooking the precipitous decline in Federal tax receipts, demonstrating that we were touting a "recovery-less recovery."
Our troll no doubt read a post that originated with Lee Adler of the Wall Street Examiner, who has blogged about this a number of times. Lee Adler and Russ Winter of that site are pretty smart cookies (Lee was one of the few people who called the 2008 market crash a few weeks ahead of time). Unfortunately, they decided to go to a $$$ subscription-based service, and their readership plummeted (including me). Even more unfortunately - for them - it appears they have been bearish throughout the last 9 month rally.
Lee Adler's point is that Federal tax receipts are still down year-over-year, so of course there is no recovery. Unfortunately (there's that word again), this is a classic case where simply citing YoY numbers misses important turning points.
Let's look at what the Federal tax receipts actually show. The raw data is available, on a daily basis, at this page at the US Treasury's website. Below is a chart of the month-end data from September through December 2008 and 2009, with the %age change:
Month / $Billions 2008 / $Billions 2009 / YoY % change
September 142,759 / 128,216 / -12.3%
October....142,514 / 117,170 / -17.8%
November. 135,620 / 127,673 / - 5.8%
December..167,634 / 154,923 / - 7.8%
1. The absolute bottom was in October
2. The maximum YoY% decline was in October.
3. In 2008, November's receipts were less than October's.
4. In 2009, November's receipts were more than October's.
Historically, treasury receipts bottom one to two quarters after the end of a recession. (After all, businesses don't start paying withholding taxes until *after* they hire new workers, right?).
Conclusion: Most likely, October was the bottom for tax receipts.
Looks like the Doomers are going to have to move the goalposts again.