Zeb_Carter
.-- - ..-.
- Joined
- Jun 15, 2006
- Posts
- 20,584
Budget Deficit in the Trillions
An interesting piece in USA Today has been making the rounds lately. It points out the dirty little secret in federal government accounting: the yearly deficit figure is a lie. In fact, instead of the 2005 federal budget deficit being $318 billion, it's actually over 10 times higher. 3.5 trillion dollars, as a matter of fact. How can this be? Read on.
The reason why is simple. Congress and the White House do not include unfunded Social Security and Medicare obligations in their accounting. Both of those programs are heavily in the hole, but their deficit is not "paid for" out of the current federal budget. Those programs' shortfall is just passed on down the line. Do you know what would happen to the officers of a corporation who tried to pass off this sort of accounting method in the real world? They would go to jail.
Year after year the government gets away with it. Why? Because they get to make up their own accounting rules. The White House uses the excuse that Congress could change Social Security and Medicare benefits at any time, so their future cost shouldn't be included in the present budget. Try that on Wall Street.
An interesting piece in USA Today has been making the rounds lately. It points out the dirty little secret in federal government accounting: the yearly deficit figure is a lie. In fact, instead of the 2005 federal budget deficit being $318 billion, it's actually over 10 times higher. 3.5 trillion dollars, as a matter of fact. How can this be? Read on.
The reason why is simple. Congress and the White House do not include unfunded Social Security and Medicare obligations in their accounting. Both of those programs are heavily in the hole, but their deficit is not "paid for" out of the current federal budget. Those programs' shortfall is just passed on down the line. Do you know what would happen to the officers of a corporation who tried to pass off this sort of accounting method in the real world? They would go to jail.
Year after year the government gets away with it. Why? Because they get to make up their own accounting rules. The White House uses the excuse that Congress could change Social Security and Medicare benefits at any time, so their future cost shouldn't be included in the present budget. Try that on Wall Street.
