This is a most troublesome scenario for the U.S. Treasury: record high spending coupled with record low tax income. Keep in mind too that April is traditionally the most lucrative month for tax collection. Thus, the printing presses will be in high gear to offset the imbalance. China will be quite pleased with their USD bases investments!

PM's are poised - VHF

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First Tax-Month Budget Deficit Since 1983

Tyler Durden

May 12, 2009

The U.S. reported the first April budget deficit in over 25 years, specifically $21 billion on a significant drop in individual and corporate tax receipts. April, which is traditionally the strongest budget revenue month due to the peak in individual tax revenue collection was unable to buck the trend in second derivatives and green shoots and is likely an indication of just how much worse the economy will get with traditional Treasury revenue sources rapidly disappearing. The Congressional Budget Office, which forecasts a $1.75 trillion budget shortfall for the Sept. 30 ended fiscal year, had estimated a deficit of $19 billion, further demonstrating that green shoots are merely rose-colored glasses.

Bulls will point out that at this point the U.S. will merely print its way out of any deficit, as the government is more than happy to take the place of any and all taxpayers, and the resultant record debt/GDP ratio will be merely the "next administration's problems."

click to enlarge: http://tinyurl.com/pfvwav