A belated Happy Federal Fiscal New Year to you!

Perhaps you missed the celebration back on October 1st when Uncle Sam officially put the 2014 fiscal year to bed and launched into 2015.  That’s because there was none, and why would there be?

The United States government’s record of maintaining its financial house over the previous 12 months makes Bernie Madoff look like the CEO of the Year.  The federal government continued to expand its Ponzi scheme, not only by spending more than it collected, but also by not even attempting to fix the problem.

Consider this information supplied by the non-partisan Committee for a Responsible Federal Budget (CFB):

–The Congress passed no appropriations bills for the 2015 fiscal year. Instead, lawmakers simply continued the trend of passing continuing resolutions.  The current CR runs until mid-December.

–Just one major tax reform plan was offered.  It came from House Ways and Means Committee Chairman Dave Camp (R-MI) and included reductions, reforms and repeals of a variety of tax breaks that fill the tax code.   The CFB says it’s the most significant proposal in nearly 30 years, but it’s unclear if it will get any traction.

–The government suspended the debt ceiling twice during the 2014 fiscal year.  CFB says the government continues to use something called “extraordinary measures” to borrow money to run the government until the next deadline—March 15, 2015.

–CFB says that on three occasions, Congress used budget gimmicks to pay for major expenses. Those include the “doc fix” so doctors caring for Medicare patients would get full payment and something called “pension smoothing” that puts $6.4 billion in the Highway Trust Fund, but fails to account for the red ink in the future.

–The government shut down for 16 days during the last fiscal year because no funding bill had passed and we were 108 days into the fiscal year before lawmakers passed an appropriations bill for 2014.

–We added $800 billion to the national debt, which now stands at $17.8 trillion.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, says there won’t be much to miss about fiscal year 2014.  “Who longs for government shutdowns, debt ceiling fights, appropriations stasis and more debt?”

Will fiscal year 2015 be any better?  Is there any reason to think so?

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Comments

  • Kelly

    @Bookman....while your arguments are generally on alignment with mine, I gotta go with HopsHip on this one. I just studied, and recommend you both do, Mylan's last 10k. Mylan always appears to be in a state of expansion thus investment. No sitting on significant stock appreciation over there.

    • The bookman

      Kelly,

      If every US corporation were reinvesting their winnings as you suggest is occurring with Mylan, our country would not be wondering about numbers like worker participation rate and the cost of a gallon of milk. Not counting the stimulus, we have pumped almost $4T into the financial sector by purchasing securities with imaginary money.

      The markets utilized that injection to propagate an ever rising value, and investors rode that wave to the all time highs we currently observe, all in an environment of sluggish global economic activity.

      The lack of a robust recovery indicates the absence of business expansion, and that indicates the lack of investment. I'm sure there are many shining examples of growing companies that are investing and expanding, and Mylan's 10-K is full of forward looking statements indicating the risk associated with their growth.

      Cash held on corporate balance sheets approach $2T, a record high, surpassing the previous year. Apple in 2004 held a little over $5B on its balance sheet, and now holds over $150B. That is money on the sideline, not working or producing jobs.

      Now I don't claim a conspiracy of enriching the fat cats, but I do think it is long passed time to trigger the release of that cash into riskier returns by allowing the gravy train that has been QE to end and take the correction that is coming.

  • David

    The government officials may be saying goodbye to fiscal year 2014 but the tax paying citizens will have a long expensive relationship with it going forward, presumably for the rest of our lives!

    Thanks Obama, Manchin & Tennant!

    You too! Rahall....

  • David

    What?

  • David

    Can the US get a 0 percent introductory rate

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