True federal deficit unimaginably larger than official tally

Sunday, June 03, 2012 by: J. D. Heyes
Tags: federal deficit, trillions, bankruptcy

(NaturalNews) Just how much in debt is the United States? How much more debt is being added by overspending lawmakers and presidents each year? The answer isn't what you think, according to a new evaluation of the numbers using a quaint, time-tested concept known as real math.

"Officially," the federal deficit for fiscal year 2011 was $1.3 trillion, an incredibly huge figure in and of itself. That means, if you believe the administration, that the government only spent $1.3 trillion more than it took in. Incredible.

Only, the figure is grossly misleading because it doesn't account for the government's entire unfunded liabilities such as Social Security and Medicare. When you add those figures in, the amount of last year's true deficit rises to $5 trillion. No, that's not a misprint - trillion, with a "t."

That would mean every household in the country, in order to pay the debt off, would owe nearly everything they earned, or $42,054 each. That's almost four times the official number reported by Congress. And by the way, the median U.S. household income is $49,445, according to the U.S. Census Bureau.

Funny numbers, but real money

Why the disparity? Because Congress, as usual, cooks the books, so to speak, and uses made-up formulas to calculate the debt (hide the debt is a more accurate statement). Lawmakers don't use standard account methods, which would include the money the government owes. As it stands, Congress doesn't count the cost of promised retirement benefits - an amount that, extrapolated over the next 50 years, reaches a nearly unfathomable number.

And while Congress doesn't have to follow standard account practices, keep in mind that federal law requires your state and local governments to use them. Sound familiar? "Do as I say..."

So, using real accounting methods, the true deficit last year would be $3.7 trillion higher, because that's the amount Social Security, Medicare and other retirement programs rose in 2011.

The math becomes $1.3 trillion + $3.7 trillion = $5,000,000,000,000, or about one-third of our national annual gross domestic product.

According to an analysis of true debt by USA Today:

- Social Security continues to be the biggest drain, now and especially in the future, on the federal budget. Picture this: The government will need $22 trillion right now, today, to set aside and collect interest if it ever hopes to pay the promised benefits to workers and retirees, over and above annual collected taxes and fees. To put that into perspective, that is $9.5 trillion more than was needed in 2004. Imagine what is going to be needed in another eight years, and beyond, if nothing changes.

- If real accounting were used, deficits would be six times higher than the official figure of $5.6 trillion between 2004 and 2011.

- Right now, federal debt and retiree commitments are equal to $561,254 per household. "By contrast, an average household owes a combined $116,057 for mortgages, car loans and other debts," USA Today said.

Sheila Weinberg of the Chicago-based Institute for Truth in Accounting says that, essentially, the government by law, is prohibited from telling the truth about this enormous fiscal crisis.

Kicking the can down the road

True enough. But if you can believe it, there are some who actually defend the deceit.

Jim Horney, a former Senate budget staff expert now at the liberal Center on Budget and Policy Priorities, says it's perfectly fine not to count promised benefits as part of the deficit. Amazingly, he says that's because if the government doesn't have to pay it yet, then technically that money isn't owed and, therefore, it's not "officially" adding to the debt. Congress, says Horney, can change the law and wipe out its obligation.

"It's not easy, but it can be done. Retirement programs are not legal obligations," he says.

The naivety of that statement is monumental. Any politician who even mentions cutting Social Security or Medicare is crucified in the public forum by self-serving politicians and their media allies (remember when George W. Bush dared to suggest the government privatize Social Security during his first term?).

So instead, successive Congresses have kicked the benefits can down the road for someone else to deal with in the future, when the incredible weight of the burden literally crashes the system.

Better save your pennies yourself.

Sources for this article include:

http://www.usatoday.com

http://www.census.gov/hhes/www/income/index.html

http://www.usdebtclock.org/