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Speaker 1: You may have seen floating around social media recently tons

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Speaker 1: of posts claiming that the IRS collected a record four

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Speaker 1: point nine trillion dollars in taxes this year. Well, not

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Speaker 1: only is this not true, but the reality is actually worse,

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Speaker 1: and so we're going to take a look at what

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Speaker 1: actually took place with the IRS and tax collection for

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Speaker 1: twenty twenty three. Number two, we're gonna take a look

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Speaker 1: at what the result of this is, what they have

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Speaker 1: to do to make up for a shortfall. And then

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Speaker 1: number three, obviously we're gonna take a look at what

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Speaker 1: this means for the markets, because this will, or at

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Speaker 1: least it should have an impact. So you may have

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Speaker 1: seen posts like this saying that the IRS raked in

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Speaker 1: a record four point nine trillion in taxes last fiscal year.

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Speaker 1: And the reason why I think this is right now

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Speaker 1: circulating around social media is because of this post that

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Speaker 1: I found from the Journal of Accountancy. It was published

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Speaker 1: recently on January fourth of twenty twenty four, and most

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Speaker 1: people are mistaking this because they show that the IRS

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Speaker 1: collective four point nine trillion in total taxes, but it's

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Speaker 1: for fiscal year twenty twenty two, So I think most

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Speaker 1: people are just not thinking with the year change going

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Speaker 1: to twenty twenty four. They see twenty twenty two and

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Speaker 1: think last year. No, this is actually two years ago.

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Speaker 1: As we can see from the Federal Reserves website, the

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Speaker 1: four point nine trillion dollar number came in in twenty

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Speaker 1: twenty two. So what actually happened for twenty twenty three. Well,

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Speaker 1: the reality is tax revenue actually fell. If we go

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Speaker 1: to the federal government's website Fiscal Data dot Treasury dot gov,

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Speaker 1: we click on revenue and we can see the current

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Speaker 1: year to date figures, which shows that the government has

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Speaker 1: collected six hundred seventy eight billion dollars in taxes just

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Speaker 1: in this fiscal year to date, which is up nineteen

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Speaker 1: percent from the same couple of month period last year.

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Speaker 1: But what we really want to know about is what

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Speaker 1: took place during the entire fiscal year of time twenty

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Speaker 1: twenty three, And here we can see that tax revenue

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Speaker 1: from twenty twenty two to twenty twenty three actually declined.

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Speaker 1: In twenty twenty three, they collected a total four point

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Speaker 1: four to four trillion dollars in taxier twenty twenty three,

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Speaker 1: which was down from the four point nine they collected

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Speaker 1: in twenty twenty two. So last year the federal government

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Speaker 1: took less in taxes than they did in twenty twenty two. Now,

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Speaker 1: if you're anything like me, your initial reaction is, yes,

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Speaker 1: I can't stand how much money Uncle Sam takes from

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Speaker 1: people every single year. It's the most patriotic thing you

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Speaker 1: can do to pay as little as possible in taxes,

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Speaker 1: because if you believe that the government has your best

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Speaker 1: interest at heart, you want to follow the rules that

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Speaker 1: they've given you by taking advantage of all the deductions

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Speaker 1: and credits that they give you, because they say that

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Speaker 1: those will make the country a better place. So, if

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Speaker 1: you love your country, it's the most patriotic thing you

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Speaker 1: can do to pay as little as money as possible

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Speaker 1: in taxes. So when you see that the government takes

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Speaker 1: less in taxes, you think that's a great thing. I'm

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Speaker 1: gonna shell you why this is actually usually associated with

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Speaker 1: severe economic pain. Back on the Federal Reserves website, we

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Speaker 1: see total Federal tax receipts. This is the revenue that

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Speaker 1: the government takes in taxes every year, and we can

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Speaker 1: see that the majority of the time this line just

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Speaker 1: goes up, which means that every year, usually the government

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Speaker 1: takes less in taxes than they did the year before.

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Speaker 1: But let's zoom in here to the very beginning of

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Speaker 1: this data collection, nineteen eighty one. We can see that

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Speaker 1: tax revenue declined to nineteen eighty two, and this gray

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Speaker 1: bar indicates that that decline preceded and happened then into

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Speaker 1: a recession. Moving forward a bit into time, we can

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Speaker 1: see that tax revenue really took off in the late

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Speaker 1: eighties and then stagnated from nineteen ninety to nineteen ninety one,

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Speaker 1: barely increase it again right into a recession. Going forward

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Speaker 1: a little bit farther into the future, we see the

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Speaker 1: years two thousand to two thousand and one tax revenues

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Speaker 1: declined and then again into two thousand and two, again

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Speaker 1: tax revenues declining into a recession. Fast Forwarding into the

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Speaker 1: future a bit farther, we see tax revenues peaked again

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Speaker 1: in two thousand and seven, declining into two thousand and eight,

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Speaker 1: declining again into two thousand and nine, resulting in yet

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Speaker 1: again another recession. Tax revenues really picked up again and

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Speaker 1: then peaked in twenty nineteen, tax revenues declining again into

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Speaker 1: twenty twenty, resulting in yet again another recession, which means

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Speaker 1: since nineteen eighty, for the last forty years, every single

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Speaker 1: time tax revenues have declined, we have seen a recession

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Speaker 1: every time. And yes, this recession in nineteen ninety one

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Speaker 1: happened without a decline in tax revenue, but it did

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Speaker 1: happen with a stagnating for one year of tax revenue.

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Speaker 1: But it still stands. Every time tax revenue declines a

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Speaker 1: recession has happened since nineteen eighty, that is four decades.

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Speaker 1: And yet again, from twenty twenty two to twenty twenty three,

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Speaker 1: we see another year in which tax revenues decline. Unless

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Speaker 1: a correlation that has happened one hundred percent of the

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Speaker 1: time for forty years now happens to be wrong, we

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Speaker 1: are going to get a recession in twenty twenty four. Now,

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Speaker 1: this isn't causation. It's not that the drop in tax

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Speaker 1: revenue causes the recession. It's likely the opposite, or there's

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Speaker 1: a third factor that causes tax revenues to drop that

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Speaker 1: also results in a recession. That makes sense. People have

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Speaker 1: less money, people spend less, people deleverage, people save more,

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Speaker 1: people lose their jobs. Those things result in tax revenues dropping,

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Speaker 1: those things also result in recessions. So while I'm happy

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Speaker 1: that the government gets to take less money in taxes

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Speaker 1: or they did in twenty twenty three, it will almost

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Speaker 1: certainly result in a twenty twenty four recession to make

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Speaker 1: up the difference. We see something called the national deficit.

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Speaker 1: If you spend more than your income, you have to

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Speaker 1: use debt to cover your expenses, and the exact same

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Speaker 1: thing is true of the federal government. If they spend

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Speaker 1: more than they take in taxes, they have to use

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Speaker 1: debt to cover the difference. The amount that they borrow

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Speaker 1: every year is called the deficit. Year to date, they

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Speaker 1: have borrowed thirteen percent more compared to last year during

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Speaker 1: the same period, which means that going into twenty twenty four,

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Speaker 1: as tax revenues continue to fall from the continued economic

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Speaker 1: pain and recession, they're going to have to borrow even

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Speaker 1: more than that to make up the larger difference, because

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Speaker 1: you know, the last thing they're going to do is

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Speaker 1: reduce spending to cover the difference. We've seen a brief

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Speaker 1: few month period in which interest rates on government debt

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Speaker 1: have been falling, but that is likely over now as

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Speaker 1: a result of the increased borrowing is going to start

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Speaker 1: outpacing the demand for lending to the government. Yet again,

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Speaker 1: as that deficit widens, as the country hits a recession,

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Speaker 1: they're going to have to borrow more and more. There's

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Speaker 1: going to be less money available to lend to them.

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Speaker 1: That's going to push interest rates higher up some more.

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Speaker 1: This fits with my longer term thesis I've been talking

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Speaker 1: about for over a year on this channel. Now we

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Speaker 1: are in a long term cycle that lasts about forty years.

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Speaker 1: From about nineteen forty through nineteen eighty was forty years

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Speaker 1: where interest rates and inflation were both moving higher. Forty years.

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Speaker 1: From about nineteen eighty until twenty twenty, interest rates and

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Speaker 1: inflation were both moving lower, but they bottom out when

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Speaker 1: interest rates hit zero percent in twenty twenty. And we

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Speaker 1: are in for another at least decade, but probably multi

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Speaker 1: decade phase of the cycle where both interest rates and

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Speaker 1: inflation are moving higher yet again, and there absolutely will be,

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Speaker 1: as there always are periods of time where you have

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Speaker 1: a reversal from the trend where interest rates go down

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Speaker 1: for a short period of time, but the longer trend

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Speaker 1: is higher for longer and if you've recently jumped on

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Speaker 1: the bandwagon that bonds are by right now, just understand

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Speaker 1: that you are in one of the most crowded trades

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Speaker 1: because right now, according to Bianco Research, we are seeing

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Speaker 1: the most bullish sentiment on bonds since twenty twenty, which

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Speaker 1: historically was not a great time to be bullish bonds,

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Speaker 1: as they started dropping rapidly after that. Now, as you

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Speaker 1: and I both know, when they get to a point

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Speaker 1: where interest rates are a little bit too high for comfort,

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Speaker 1: the Federal Reserve will step in and save the day

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Speaker 1: and start printing to make up for that gap. This

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Speaker 1: will likely result in a return to quantitative easing, where

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Speaker 1: their balance sheet starts to increase yet again as they

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Speaker 1: buy up more government bonds. But even though that will

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Speaker 1: result in lower interest rates for the government, that will

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Speaker 1: likely result in higher interest rates for everybody else. This

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Speaker 1: is because the government spending at that point will be

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Speaker 1: done through money printing. That will mean more money in

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Speaker 1: circulation that will have the impact of pushing higher on inflation,

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Speaker 1: and as inflation moves higher yet again, that means the

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Speaker 1: only people who are going to be lending below inflation

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Speaker 1: are the Federal Reserve and people like you and I.

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Speaker 1: Cannot access lending from the Federal Reserve. People like you

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Speaker 1: and I have to access lending from people who actually

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Speaker 1: care about profits, which means they won't be lending at

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Speaker 1: a real negative rate. They'll be lending at a rate

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Speaker 1: that's above the inflation rate, and when inflation moves higher,

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Speaker 1: so to interest rates. For those of us who are

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Speaker 1: paying attention, this is actually very good news because number one,

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Speaker 1: recession means there are going to be deals that create

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Speaker 1: fortunes over the long term, and number two, inflation is

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Speaker 1: a fantastic way to build wealth over the long term.

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Speaker 1: If you understand how to use debt, if you need

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Speaker 1: help putting all those pieces together, I highly encourage you

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Speaker 1: to join Heresy Financial University and to join hundreds of

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Speaker 1: other members who are learning how to make massive profits

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Speaker 1: and protect themselves from losses. Despite all the craziness going

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Speaker 1: on in markets today, there are a few slots left

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Speaker 1: of the discount code new Year Knew Me to get

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Speaker 1: fifty percent off. By the time you watch it, there

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Speaker 1: are probably just a couple of lefts, So go ahead

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Speaker 1: and try that code out code new Year Knew Me

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Speaker 1: to get half off. Thanks so much for watching. Have

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Speaker 1: a great day,