The Real U.S. Deficit is in the Trillions

W

wareco

http://www.usatoday.com/printedition/news/20060803/1a_coverart03.art_dom.htm

The federal government keeps two sets of books.

The set the government promotes to the public has a healthier bottom line: a $318 billion deficit in 2005.

The set the government doesn't talk about is the audited financial statement produced by the government's accountants following standard accounting rules. It reports a more ominous financial picture: a $760 billion deficit for 2005. If Social Security and Medicare were included — as the board that sets accounting rules is considering — the federal deficit would have been $3.5 trillion.

Congress has written its own accounting rules — which would be illegal for a corporation to use because they ignore important costs such as the growing expense of retirement benefits for civil servants and military personnel.

Last year, the audited statement produced by the accountants said the government ran a deficit equal to $6,700 for every American household. The number given to the public put the deficit at $2,800 per household.

A growing number of Congress members and accounting experts say it's time for Congress to start using the audited financial statement when it makes budget decisions. They say accurate accounting would force Congress to show more restraint before approving popular measures to boost spending or cut taxes.

“We're a bottom-line culture, and we've been hiding the bottom line from the American people,” says Rep. Jim Cooper, D-Tenn., a former investment banker. “It's not fair to them, and it's delusional on our part.”

This is just an excerpt. ET says the actual article is too long to post in its entirety.
 
Not recent news.

Clinton never actually had a surplus, their reporting of the budget omitted Social Security & Medicare obligations.

Although I think it's getting pretty clear that both of those programs won't be around in the near future.
 
Wareco that is a great point the CPI and PPI numbers have been cooked ever since the Fed Gov tied entitlement increases to them. They actually reclassified housing costs as an investment.
 
not counting social security would be okay if the social security fund was intact like it should be.

when companies report pension obligations in the liabilities section of the balance sheet, the number often nets out the cash in the pension fund.

estimated pension liabilities - pension assets

companies play games with the estimate, but that's another story.
 
Quote from Hydroblunt:

Not recent news.

Clinton never actually had a surplus, their reporting of the budget omitted Social Security & Medicare obligations.

Although I think it's getting pretty clear that both of those programs won't be around in the near future.
More...
yeah exactly! americans shld be prepared to kiss goodbye to a good chunk of those benefits imo :-))) Gvt is NOT the last resort lender to Medicare etc... YOU are!
 
Why is this new news? It's common sense.

Social Security and Medicare, in its current form, will not exist in the near future.

non-marketable restricted bonds, like the trillions which currently exist in the Social Security Trust Fund, do not fit the definition of an asset. They can be cancelled at anytime nor can they be sold.

Also I wonder how much economic resources its gonna take when the boomers are shipped to hospitals and nursing homes. No amount of cash, regardless of how much the fed prints, will solve that.

the inflationary potential is endless.
 
Quote from timmyz:

not counting social security would be okay if the social security fund was intact like it should be.
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,Please explain to me HOW the entity that prints money can actually SAVE MONEY the way you imply for later use?

call me nuts but,it's impossible for the gubberment to save money . It can only fail to collect as much because it is obligated to spend every dime it collects.

for example the lockbox scenario is exactly the same as NOT PRINTING MORE MONEY ,

putting curency in a lockbox until later is equivalent to freshly printed money in the future.

printing coupons that represent future printing is what we have now
 
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