"And that doesn't even *count* the moral bankruptcy, BWAH HA HA HA!"
Posted on 10/20/2009 6:41:42 PM PDT by RobinMasters
The real 2008 federal budget deficit was $5.1 trillion, not the $455 billion previously reported by the Congressional Budget Office, according to the 2008 Financial Report of the United States Government released by the U.S. Department of Treasury, Jerome Corsi's Red Alert reports.
The difference between the $455 billion "official" budget deficit numbers and the $5.1 trillion budget deficit based on data reported in the 2008 financial report is that the official budget deficit is calculated on a cash basis, where all tax receipts, including Social Security tax receipts, are used to pay government liabilities as they occur.
The calculations in the 2008 financial report are calculated on a GAAP basis ("Generally Accepted Accounting Practices") that includes year-for-year changes in the net present value of unfunded liabilities in social insurance programs such as Social Security and Medicare. Under cash accounting, the government makes no provision for future Social Security and Medicare benefits in the year in which those benefits accrue.
(Excerpt) Read more at wnd.com ...
Ping.
This is normal for government accounting, in any year, for any government. GAAP doesn’t apply to governments. Governments have tax revenues and (barring special cases like oil states with sovereign welth funds) do not have a way to invest funds to obtain income streams independent of taxation.
Worse this year for us, but it would have looked nearly as bad at any time in the last few decades.
This used to be a great country. No more. We are so far in debt, I find it hard to see how we’ll get out. And the Marxist in the White House keeps adding trillions to Federal expenditures. I guess he really does want to wreck the country. Even a far out leftist like Obama should be able to do simple addition.
This looks very, very dire.
Here’s another one.
I agree. I believe it's on purpose. The more chaos he can create, the more apathy will set in, the more people will cry out for a "savior."
In my opinion, Oboma truly believes he is a real messiah. I think there's something seriously wrong with him mentally. No man in his right mind would do the things he does. The people he hires are as insane as he is.
Although he too may have been misled by earlier authors and is not sophisticated enough to understand reality.
Like it or not, we need to stop viewing Social Security as an insurance program; as an entitlement; as a paid for Trust. Because it isn't any of those things.
FICA is just a payroll tax paid by everyone on earned income to specified levels. That simple.
If you look at the rate structure imposed by the Internal Revenue Code, and impose FICA on that structure, you will still see that the system is heavily stacked against people who earn higher income levels. Levy of FICA on wages below $100,000 just makes the system somewhat less progressive.
As to the benefits which Corsi wants to treat as an accrued liability, the short answer is that they aren't a liability. They are just the current year benefits payable to the benefit recipient group as defined by Congress from year to year.
At the point where payment becomes a problem, Congress will redefine the level of payments and the group to which they are payable.
The current year deficit is still absurd--we are paying for way too much; we are borrowing way too much to pay for things we shouldn't be paying for at the federal government level. But, let's not get confused about the actual state of affairs.
Face it, we are already in a death spiral, and no one can pull us out. At this point, we would have to cancel a big chunk of future entitlements and a lot of discretionary spending to recover...someday. This clearly won't happen, no matter who is president. Even with a conservative president, the public demands that we deficit spend and grow the government, and we sure will. Within a few years, we won't be able to secure the debt, so we will monetize it a little at a time as we are already. Inflation will hit, and your personal real savings will fall. We'll try some nutty stimulus, and it will make matters worse. In the end, we'll not have a choice in cutting the government because reality will do it most painfully.
I don't care who the president is; he is a slave to an ignorant populace that loves being lied to. Let's just see a presidential candidate win on slashing entitlements to seniors.
"And that doesn't even *count* the moral bankruptcy, BWAH HA HA HA!"
we been bankrupt for a long time
It's not an end-all idea and it's drastic but if wages, taxes, and prices increased at least 50% across-the-board overnight with a permanent freeze on adjustable rate loans, there would be a lot of equity out there (not to be borrowed against again) and people would be able to pay off mortgage debt faster since payments would stay the same on fixed-rate loans. Once that debt is paid down or off on all of that real estate, there's some of your national wealth, and possibly some credit. The ones who would really get screwed though would be debt-free people living on savings and other countries that bought our debt. Yes, it would kill overseas confidence in the US economy, but it might provide this country with a fresh start whereas we just stagnate for decades and still never get investor confidence back.
If there is no sea change in gov't in 2010 or '12, it's not pretty but this may be the only way to go for future generations. What else could this country do if the current mindset in DC sticks?
Correct. GAS is applied to governmental organizations and the annual Federal Reserve audit.
The article is disingenuous. While we became a net debtor nation in 1985 and the world's largest debtor nation by 1989, we went bankrupt in 1933 as pointed out by James Trafficant. But hey, it's only a conspiracy theory, so everyone can just continue to ignore it or something.
Never. We passed the tipping point in 1913 with the Federal Reserve Act that set the rules to ensure we would always be in debt.
We've already lost our chance. We became a net debtor nation for the first time 1985 and the world's largest debtor nation in 1989. Under President Reagan :-(.
It's difficult for me to see the kind of mandate that President Reagan was handed in 1980 being used any more efficiently now.
Could it - possibly - be argued that trading paper for material might be a way to ramp up expansion?
China will be a net debtor soon, I understand.
Reference please. If this is indeed the case, the world is doomed as most of the world's manufacturing has been outsourced to China.
“the country will swing to a trade deficit early next year”
http://www.freerepublic.com/focus/f-news/2362210/posts
Not actually the same as being a net debtor I see now. But it’s certainly a couple of rungs up that ladder.
Yes, that is trade deficit, not overall debtor status, they're not the same, but the former leads to the latter. This is a graph of the US trade deficit. We first went into a trade deficit around 1970 which would put it about the time Nixon imposed wage & price controls. We didn't go into a permanent deficit until the masterful hand of Carter was guiding the economy.
Trade surplus represents the amount of funds available for foreign investment. In this case, China has been the major sink for new US debt. The amount of time between going into a permanent trade deficit and becoming a debtor nation is the time it takes to sell off all accumulated international investments (living off of savings not salary). The graph linked above shows exactly why[1] it took only four years to go from being a debtor nation to the world's largest debtor nation.
So yes, China going into a trade deficit is bad news and if they do not recover they'll be selling their US dollar investments to make up the balance and that is very bad news for us.
[1] The plunging line in the last half of the 1980s is steeper than it looks because the y-axis is a % of GDP and the US was also going through the start of the incredible Reagan Boom years at the same time.
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