[inquest]

Well, I understand that there are two "debts" that get talked about. There's the "publicly held" portion and the portion that's based on trust funds such as Social Security (and then of course there's the total of the two). The first is the one that gets quoted all the time, and that's the one whose changes are defined by (what gets reported as) the deficit.

Do I have that right?

[simon says what]

Well, I understand that there are two "debts" that get talked about. There's the "publicly held" portion and the portion that's based on trust funds such as Social Security (and then of course there's the total of the two).

Basically I think you are right. The SS IOU's are not held by the public. They are in that file cabinet in West Virginia President Bush referred to in his Social Security statements. The debt that you see quoted on "debt clocks" and in the news is all of the debt public and trust fund combined.

Just to elaborate a little further too on our governments number keeping. The numbers they use in almost all government statistics are "massaged". Our budget deficits do not reflect the true shortfall for our budgets. Inflation is understated using "hedonic adjustments". An example of such an adjustment is a laptop you bought today is 2x as powerful from the laptop you bought 5 years ago due to faster processing, more memory, etc. The government statistically adjusts the price of new laptop down to reflect these "improvements". The problem with this adjustment is you the consumer still paid the sticker price of the new laptop... not the adjusted price in the CPI. Another thing they do with the CPI is called substitution. The theory behind this is if an item gets to expensive (say steak), the consumer will choose an alternative (say chicken). The government CPI statistically adjusts now for substitution even though the price of steak has continued to rise. There are other manipulations that go on with the CPI besides these examples. Another government number that is manipulated is employment. The government uses a "birth/death" creation of small business in the employment statistics. Basically this is a statistical guess at the number of jobs created or lost due to small businesses in the reporting period. It is another massaged number.

If inflation and unemployment calulations stayed constant going back over history, today's published numbers would be waking the population up to the economic difficulties we face. I don't think they will be kept hidden much longer.

Ostrich Optimists flame away.