Reviewing the January 2013 Treasury Statement

The Treasury Department on Tuesday (Feb 12, 2013) released the Monthly Treasury Statement for January 2013 which showed the U.S. ran a surplus of $3 billion in January for the first tie since 2008.  However, the surplus was actually driven by a 16% increase in tax revenue following the tax increases that took effect early this year, including the expiration of the payroll tax cut. Noting the effect of this expiration of the payroll tax cut is not an endorsement of its continuance as it affects the social security system.

When looking at this report, it’s important to keep in mind that forcing Americans to cover Washington’s overspending is not a sustainable solution.

• A recent Congressional Budget Office report projected deficits would shrink in the short-term as a result of the increase in tax revenues.
• But the report shows deficits will rise again as spending on government retirement and health programs and interest on our massive debt increases.

In the State of the Union address, President Obama called for a “balanced approach” to deficit reduction. But, as evidence below, the White House’s approach has been anything but balanced.

This year Washington has already raised taxes on Americans, but has done nothing to cut spending. We can’t wait any longer to have a real discussion on spending.

• The U.S. has recorded a deficit 45 of the last 48 months and we’ve run a deficit of $290 billion in the first four months of fiscal year 2013.

What happens if we don’t cut spending?

• The CBO warns that as a result of large deficits, “high and rising debt would have serious negative consequences.”
• CBO adds that our National Debt “would increase the risk of a fiscal crisis, during which investors would lose so much confidence in the government’s ability to manage its budget that the government would be unable to borrow at affordable rates.”

However, it is also important to recognize cutting spending isn’t just to see a zero at the end of the year. It’s about having a nation where government retrains itself to remain within the limits of the constitution in regard to personal liberty and freedom and is not a stumbling block or even an unreasonable hindrance to the business community. It is about having an the economic environment is one where small businesses are willing to expand, invest, and hire; an environment that creates opportunity for all Americans.

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