Feds' budget tricks hide trillions in debt

MSN ^ | 11/21/2007 | Scott Burns

[doc30]

Every year, tens or even hundreds of billions of dollars are quietly added to the national debt -- on top of the deficits that we hear about. What's going on here?

Consider the proud trumpeting that came from Washington at the close of fiscal 2007. The deficit for the unified budget was, politicians crowed, down to a mere $162.8 billion.

In fact, our government is overspending at a far greater rate. The total federal debt actually increased by $497.1 billion over the same period.

[snip]

Federal deficits versus increases in the federal debt

Fiscal year	Reported surplus/deficit	Debt increase	Debt at start of year	Debt at year's end
2000	$236.2 billion surplus	$23.2 billion	$5.606 trillion	$5.629 trillion
2001	$128.2 billion surplus	$141.2 billion	$5.629 trillion	$5.770 trillion
2002	$157.8 billion deficit	$428.5 billion	$5.770 trillion	$6.198 trillion
2003	$377.6 billion deficit	$561.6 billion	$6.198 trillion	$6.760 trillion
2004	$412.7 billion deficit	$594.7 billion	$6.760 trillion	$7.355 trillion
2005	$318.3 billion deficit	$550.6 billion	$7.355 trillion	$7.905 trillion
2006	$248.2 billion deficit	$546.1 billion	$7.905 trillion	$8.451 trillion
2007	$162.8 billion deficit	$497.1 billion	$8.451 trillion	$8.949 trillion

[doc30]

The bottom line is that the govenment issues a figure for a reported surplus or deficit. The problem is that the total debt increases every year by more than what the government says is the deficit for that year. And even when we had a surplus, the national debt still went up. And, accoring to new numbers, social security will be running out about 8-9 years, not the ~30 years publicly acknowledged. This is hidden by the same accounting tricks.

[Crazieman]

Yeah, medicare/social security has about $50+ trillion in debt.

The government has about 5 sets of books.

[DeaconBenjamin]

The government has about 5 sets of books.

That's actually encouraging. I didn't think they had any books.

[EagleUSA]

OK, so when does the fed devalue the dollar?? The debt will NEVER be paid, so when does the house of cards come down?

[goldstategop]

If a private business tried Enron style accounting tricks like that, its management would be hauled off to prison. Yet the federal government is exempt from the same Sarbanes Oxley rules it imposes on every one else.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[DManA]

Refer these numbers to anyone who insists on arguing that Clinton ran a surplus.

[cinives]

Since the dollar has lost about 40% of its value this year, the devaluation is already underway.

[rhombus]

The debt will NEVER be paid, so when does the house of cards come down?

Oh easily by 1976... or if not then surely by 1980... or if not then of course by... Voodoo economics, I tells ya... voodoo economics...

[jiggyboy]

OK, so when does the fed devalue the dollar??

Every time they drop interest rates for no good reason. As noted in the other post, this has been abetting the dollar decline for some time now.

[ConservativeMind]

Good point.

SOX, despite its hassles, greatly increases our ability to rely on corporate information.

It is now moderate difficult for a company to have fraud or corruption as a reason for failure.

Now, it’s mostly just marketing failure or operational problems to blame.

[the_devils_advocate_666]

My liberal brother told me over Thanksgiving that Bill Clinton had a balanced budget and the deficit was in decline during his terms. Is that true?

[Moonman62]

If a private business tried Enron style accounting tricks like that, its management would be hauled off to prison. Yet the federal government is exempt from the same Sarbanes Oxley rules it imposes on every one else.

I've been saying the same thing for years. Good luck getting anybody to care.

[mysterio]

Our debt is a national security crisis.

[DoughtyOne]

Perhaps the single most effective law that could be passed, would be one that held our federal officials criminally liable for malfeasance in office. Expose them to the penalties the private sector would face if they did the same things.

[Sgt_Schultze]

Clinton's "surplus" was a result of the peace divident which impelled a halving of ready soldiers and Reagans 600 ship navy to some 350. The loss of US firepower has not been replenished and will not be done so on the cheap.

clinton also damaged US security in the tens of trillions of dollars through his release of US technologies to the Chinese. Some $50 trillion investment during the cold war was wiped out by one president's greed for reelection - and still he is loved by his presstitutes.

[Nephi]

My liberal brother told me over Thanksgiving that Bill Clinton had a balanced budget and the deficit was in decline during his terms. Is that true?

He was drug, kicking and screaming to the table for a balanced budget, which the Republicans made an issue for the '94 campaign cycle. If memory serves, this followed on the heals of Hillary's attempt to commandeer the nations medical system. In the months long negotiation process, Clinton memorably said that the budget could be balanced in , 5 years, 7 years or 9 years, depending on what his mood was on the particular day.

Once the GOP took over the majority (thanks Perot voters) and enacted their reforms, the deficit began to drop quicker than predicted. Newt also suffered politically during this time. This was when the government was shut down while Clinton and Newt had a stand off. The media had a field day, spotlighting all of the people harmed by the government shutdown, which of course, they blamed solely on Newt. In my view, Newt caved right as public opinion started to figure out what was really going on.

So, the next time your brother brings it up, I would simply ask him if he is suggesting that the balanced budget was Clinton's inititative and then sit back and watch the stutter fest.

[mek1959]

Gosh you are dead right and I just wish this could get out to a larger audience - though most would not understand. Sadly, all of the presidential campaigns these days are essentially predicated on federal spending staying as it is. There are no hero’s out there willing to take on the entitlements. Instead the “worst” generation that followed the “Greatest” generation will vote themselves access to the taxpayers dollars. Believe me, I know, my mother is one of them. She put in 30K through payroll deductions and believes that entitles her to $100,000’s social security/medicare benefits. BTW, she’s a democrat.

Gosh, find me a deal where I can turn $30,000 into $100,000’s that you the taxpayer get to pay to me!

We’re like frogs in the kettle being heated.

[PugetSoundSoldier]

Fred Thompson is talking about Social Security reform, and has a plan that should reduce that big liability.

[Toddsterpatriot]

The problem is that the total debt increases every year by more than what the government says is the deficit for that year.

Why aren't government assets included in this story?

[11th Commandment]

The federal government "fund" trick has been around for 30-40 years. Here are the funds that I remember: Social Security, Medicare; General, Transportation, Land.

The trick is that for years the Social Security, Transportation and land funds run large "surpluses". This amount is netted against the large deficit in the General fund. What suffers are roads and infrastructure that congress does not build as well as park expansion and maintenance. So when the Minneapolis Bridge collapsed this summer and the “solution” was more taxes is a myth. The solution is that congress spends earmarked gas taxes on roads and bridges and stop raiding the fund. If they can’t spend the money fast enough, then lower the tax.

Next is Social Security. This article should point out that there is not a “fund” or “lock box” for Social Security. Why, because the only investments by law that SSA is allow to buy are US Treasuries. This is like your 401(k) only having investments that are loans to yourself. You might have a lot of “assets”, but you ain’t retiring.

Another poster has it right- SS is breakeven in 7-8 years, then it has to cash in its bonds to make retirement benefits. I hope the Chinese continue to like our treasuries.