Happy Deficit Day, America!

September 10, 2012
Happy Deficit Day, America!
By James R. Harrigan & Antony Davies
Every year the Tax Foundation announces "Tax Freedom Day"-the date by which the average American has earned enough to pay his taxes for the year. This year Tax Freedom Day finally arrived on April 17th. That means that, if you are an average American, it will take every penny you earned from January 1st until April 17th to pay your taxes for the year. Only what you earn from April 18th on would be yours to keep. Today, the average American has to work 107 days, or almost 30 percent of the year, to pay for government.

As appalling as the late date of Tax Freedom Day is, and it is appalling, it only tells half the story. The 107 days of your labor that Washington claims for itself do not come close to paying for government. Most Americans know that the government spends more than it takes in, and a simple measurement along the lines of Tax Freedom Day would put this into sharp perspective.

We propose "Deficit Day"-the date at which federal tax revenues run dry and Uncle Sam begins racking up more debt. This year it falls on September 10th.


If the federal government were to spend the same amount of money each day starting on January 1st, it would run through all of its tax revenue by September 10th. Everything the government spent from then until the end of the year would be on credit.

If lawmakers produced a balanced budget, Deficit Day would occur on December 31st, when the government spent the last dollar of its annual tax receipts at the stroke of midnight on New Year's Eve. But we haven't seen a balanced budget since the Eisenhower administration.

Conventional wisdom holds that the Clinton administration ran surpluses. But this is a twisting of the facts. It is true that the debt held by the public-which excludes money the government borrows from the Social Security trust fund-declined by $433 billion from 1997 to 2001. But, over those same years, the government borrowed $827 billion from the Social Security trust fund. In other words, the only way to claim that the Clinton administration ran surpluses is to admit that the government has no intention of paying back that $827 billion it borrowed from Social Security.

The latest that Deficit Day has fallen in the past 40-some years has been mid-December, at the end of the Clinton administration. The earliest was the beginning of July, during the Great Recession in 2009.

What's important about Deficit Day is the number of days that come after. Each subsequent day is another day in which the entire federal government is being paid for on credit. This year, the government will borrow, on average, $10 billion on each and every one of the 110 days from Deficit Day until the end of the year. That's 110 days of government operations that will be sitting on America's Credit Card come December 31st.

Last year, the government borrowed to pay for 132 days of operations. The year before that, 159 days. Over the past decade, the government had to borrow money to keep itself in operation for a grand total of 1,061 days. That's almost three full years of government that our children and grandchildren will have to pay for-in addition to paying for whatever the government does in the future. It's a devastating blow to their economic freedom and their future welfare.

If an individual American behaved this way he wouldn't be able to get a loan to buy a cup of coffee. When the federal government behaves this way it just prints and sells more bonds. We know that Tax Freedom Day should come much earlier in the year. We should also know that Deficit Day needs to come at the very end, if it comes at all.

But hey, happy Deficit Day.

Subculture of Americans prepares for civilization's collapse

By Jim Forsyth (Reuters) When Patty Tegeler looks out the window of her home overlooking the Appalachian Mountains in southwestern Virginia, she sees trouble on the horizon. "In an instant, anything can happen," she told Reuters. "And I firmly believe that you have to be prepared." Tegeler is among a growing subculture of Americans who refer to themselves informally as "preppers." Some are driven by a fear of imminent societal collapse, others are worried about terrorism, and many have a vague concern that an escalating series of natural disasters is leading to some type of environmental cataclysm. They are following in the footsteps of hippies in the 1960s who set up communes to separate themselves from what they saw as a materialistic society, and the survivalists in the 1990s who were hoping to escape the dictates of what they perceived as an increasingly secular and oppressive government. Preppers, though are, worried about no government.

Tegeler, 57, has turned her home in rural Virginia into a "survival center," complete with a large generator, portable heaters, water tanks, and a two-year supply of freeze-dried food that her sister recently gave her as a birthday present. She says that in case of emergency, she could survive indefinitely in her home. And she thinks that emergency could come soon. "I think this economy is about to fall apart," she said. A wide range of vendors market products to preppers, mainly online. They sell everything from water tanks to guns to survival skills. Conservative talk radio host Glenn Beck seems to preach preppers' message when he tells listeners: "It's never too late to prepare for the end of the world as we know it." "Unfortunately, given the increasing complexity and fragility of our modern technological society, the chances of a societal collapse are increasing year after year," said author James Wesley Rawles, whose Survival Blog is considered the guiding light of the prepper movement. A former Army intelligence officer, Rawles has written fiction and non-fiction books on end-of-civilization topics, including "How to Survive the End of the World as We Know It," which is also known as the preppers' Bible. "We could see a cascade of higher interest rates, margin calls, stock market collapses, bank runs, currency revaluations, mass street protests, and riots," he told Reuters. "The worst-case end result would be a Third World War, mass inflation, currency collapses, and long term power grid failures." A sense of "suffering and being afraid" is usually at the root of this kind of thinking, according to Cathy Gutierrez, an expert on end-times beliefs at Sweet Briar College in Virginia. Such feelings are not unnatural in a time of economic recession and concerns about a growing national debt, she said. "With our current dependence on things from the electric grid to the Internet, things that people have absolutely no control over, there is a feeling that a collapse scenario can easily emerge, with a belief that the end is coming, and it is all out of the individual's control," she told Reuters. She compared the major technological developments of the past decade to the Industrial Revolution of the 1830s and 1840s, which led to the growth of the Millerites, the 19th-Century equivalent of the preppers. Followers of charismatic preacher Joseph Miller, many sold everything and gathered in 1844 for what they believed would be the second coming of Jesus Christ. Many of today's preppers receive inspiration from the Internet, devouring information posted on websites like that run by attorney Michael T. Snider, who writes The Economic Collapse blog out of his home in northern Idaho. "Modern preppers are much different from the survivalists of the old days," he said. "You could be living next door to a prepper and never even know it. Many suburbanites are turning spare rooms into food pantries and are going for survival training on the weekends." Like other preppers, Snider is worried about the end of a functioning U.S. economy. He points out that tens of millions of Americans are on food stamps and that many U.S. children are living in poverty. "Most people have a gut feeling that something has gone terribly wrong, but that doesn't mean that they understand what is happening," he said. "A lot of Americans sense that a massive economic storm is coming and they want to be prepared for it." So, assuming there is no collapse of society -- which the preppers call "uncivilization" -- what is the future of the preppers? Gutierrez said that unlike the Millerites -- or followers of radio preacher Harold Camping, who predicted the world would end last year -- preppers are not setting a date for the coming destruction. The Mayan Calendar predicts doom this December. "The minute you set a date, you are courting disconfirmation," she said. Tegeler, who recalls being hit by tornadoes and floods in her southwestern Virginia home, said that none of her "survival center" products will go to waste. "I think it's silly not to be prepared," she said. "After all, anything can happen."