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What is "True deficit"? Is the US BANKRUPT?

A

Anonymous

Guest
True deficit:
$3.5 trillion
Analyst says coming Treasury report will document 'unsustainable' pace

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Posted: December 14, 2006
1:00 a.m. Eastern


By Jerome R. Corsi
© 2006 WorldNetDaily.com


A report scheduled to be released by the Treasury Department tomorrow is expected to show the true deficit in the Bush administration's 2006 federal budget to be an astounding $3.5 trillion in the red, not $248.2 billion as previously reported.
"The Bush administration is running a federal budget deficit at an unsustainable, system-dooming pace of about $3.5 trillion a year, econometrician John Williams, who publishes the website Shadow Government Statistics, told WND.

Williams' argument is fully validated in the Financial Report of the United States, a little-known report Congress has mandated that the Treasury Department publishes each year, reporting the federal budget on a GAAP accounting basis, not on a cash accrual basis.


The 2006 edition of the Financial Report of the United States is due out tomorrow.

"Typically, the Treasury reports the budget deficit on current accounts basis. That's why Treasury announced recently that the 2006 federal budget deficit was going to be $248.2 billion. But it is a gimmick," Williams claimed.

"When we see the Treasury report on Friday we are probably going to find out that the real 2006 federal budget deficit is more like $3.5 trillion."

Williams predicts, however, the mainstream media won't report it.

"It's not the type of news Reuters, Bloomberg and the Wall Street Journal like to broadcast to investors and the American public," he said. "Besides, the financial press won't take the time and effort to analyze the figures and comb through the footnotes. The report is going to be released on Friday and most financial reporters aren't accountants."

Why the huge discrepancy between the two figures?

"The $248 billion federal budget deficit figure results from what basically amounts to a cash flow analysis," Williams explained. "On a cash basis, the Treasury takes all the tax revenue, including Social Security taxes, as current income. The trick is that Treasury essentially steals the money that comes in on Social Security taxes, without accounting for any offsetting Social Security liability. When you run your accounting that way, the Treasury gets to report a federal budget deficit that dramatically reduces the real figure."

What's different about the anticipated 2006 Financial Report of the United States?

"Congress a few years ago mandated that the Treasury had to report one report each year that used GAAP accounting," Williams told WND. "Then, when you figure in all liabilities including Social Security and Medicare, the real 2006 deficit is huge by comparison. What I expect to show up on Friday is a real federal budget deficit of $3.5 trillion or more, not the $248.2 billion earlier reported."
"Even worse," Williams continued, "the U.S. Government's negative net worth widened to $49.4 trillion in 2005. For the first time, total government liabilities have topped $50 trillion, and the number is continuing to grow. The United States is bankrupt, whether the Bush administration wants to admit it or not."


How serious a problem are federal deficits of this magnitude?

"A federal budget deficit in the trillions of dollars is beyond the reach of fiscal control," Williams answered. "Even if the federal government raised individual and corporate income taxes to 100 percent, simply confiscating every penny every business and person in the U.S. made, we would still have a federal deficit."

"There are lots of people who know that the federal deficit is in the trillions," Williams continued. "The problem is that few dare sound the alarm. The magnitude of the budget deficit problem is just too enormous and neither political party has the courage to address the problem."

Williams is clear about the coming danger.

"The United States is bankrupt," he insisted. "With less than one-tenth of the actual deficit being reported each year, a cumulative negative net worth exceeding $50 trillion has built up in stealth to where the total obligations of the U.S. government are now more than four times our annual gross domestic product.

"The Treasury numbers in the Financial Report of the United States are hard," Williams insisted, "and the doomsday is not far off. Still, the Treasury is going to report the numbers on a Friday and I don't expect you will hear much about it."

Williams' website issues a dire warning to WND:


"Indeed the unfolding fiscal nightmare likely will entail a U.S. hyperinflation and a resulting collapse in the value of the world's primary reserve currency, the dollar. When this starts to unravel it will unravel fast. I don't know whether it will be the dominant issue in the 2008 presidential election, but I believe it will be by 2012."
The Treasury Department confirmed to WND the 2006 Financial Report of the United States will be issued tomorrow at 11:00 a.m. Eastern time at a Treasury Department press conference. The Treasury Department declined to comment on the content of the report.

When the report is released, Treasury Secretary Henry Paulsen and Federal Reserve chairman Ben Bernanke will still be in China. Just before Thanksgiving, China started a dollar sell-off by suggesting Beijing wanted to hold less than the current 70 percent of its $1 trillion in foreign exchange reserves in U.S. dollars. Paulsen and Bernanke plan to explore with China ways the U.S. can reduce the large and growing U.S. trade deficit.

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=53366
 

Cowpuncher

Well-known member
I suppose you would find the same problem with every president since WWII. Why all the emphasis on the current one.

Nothing is going to change - get used to it and plan your own future so accomodate the government's recklessness. Or go to another country where the exact same problem exists - only more so.
 

Disagreeable

Well-known member
Cowpuncher said:
I suppose you would find the same problem with every president since WWII. Why all the emphasis on the current one.

Nothing is going to change - get used to it and plan your own future so accomodate the government's recklessness. Or go to another country where the exact same problem exists - only more so.

The emphasis is on this one because he inherited a much better balance sheet than we now have. He is absolutely squandering our money in an unnecessary war with Iraq. Did any other President do that? I don't think so. When you look at the Federal deficit Reagan left us, George HW Bush was unable to fix, and now what George W. Bush has done, it flies in the face of Republican's claim of fiscal responsibility. Let's face it, Democrat Bill Clinton left this country in better financial shape than any Republican in a very long time. :shock:
 

P Joe

Well-known member
Disagreeable said:
Cowpuncher said:
I suppose you would find the same problem with every president since WWII. Why all the emphasis on the current one.

Nothing is going to change - get used to it and plan your own future so accomodate the government's recklessness. Or go to another country where the exact same problem exists - only more so.

The emphasis is on this one because he inherited a much better balance sheet than we now have. He is absolutely squandering our money in an unnecessary war with Iraq. Did any other President do that? I don't think so. When you look at the Federal deficit Reagan left us, George HW Bush was unable to fix, and now what George W. Bush has done, it flies in the face of Republican's claim of fiscal responsibility. Let's face it, Democrat Bill Clinton left this country in better financial shape than any Republican in a very long time. :shock:

Yes bush will leave us a big, big bill. But I would hardly say Clinton was much better. Clinton cut every program he could think of. Not saying that Bush shouldn't do the same with some, but that is why Clinton looked so good. He cut defense spending in half, he cut the Space program in half. No wonder countries caught up with us. And look at the legacy that good ole Bill left behind, A dirty skirt and a trashed White House. :shock:
 

passin thru

Well-known member
I find it interesting that the left has been complaing about spending under Bush. Yet I am yet to hear any idea of how they want to cut spending.
I am sorry a bash Bush post won't do it..........let's see some real cuts and figures.

Waiting and have been.
 

Disagreeable

Well-known member
P Joe said:
Disagreeable said:
Cowpuncher said:
I suppose you would find the same problem with every president since WWII. Why all the emphasis on the current one.

Nothing is going to change - get used to it and plan your own future so accomodate the government's recklessness. Or go to another country where the exact same problem exists - only more so.

The emphasis is on this one because he inherited a much better balance sheet than we now have. He is absolutely squandering our money in an unnecessary war with Iraq. Did any other President do that? I don't think so. When you look at the Federal deficit Reagan left us, George HW Bush was unable to fix, and now what George W. Bush has done, it flies in the face of Republican's claim of fiscal responsibility. Let's face it, Democrat Bill Clinton left this country in better financial shape than any Republican in a very long time. :shock:

Yes bush will leave us a big, big bill. But I would hardly say Clinton was much better. Clinton cut every program he could think of. Not saying that Bush shouldn't do the same with some, but that is why Clinton looked so good. He cut defense spending in half, he cut the Space program in half. No wonder countries caught up with us. And look at the legacy that good ole Bill left behind, A dirty skirt and a trashed White House. :shock:

Clinton worked with a Republican House and got the Federal deficit left to him by three terms of Republican presidents under control. There were some hard decisions made, but spending bills originate in the House, and not the White House. So the Republican House gets the same credit for cutting defense as Clinton.

Clinton left a better legacy than tens of thousands dead, half the world now our enemy, trillions $$ of debt. Yeah, I'll take that dirty skirt any time. The White House has been trashed by the Bush Bunch. Their lies that led us into Iraq, their illegal wiretapping of the American people, their sell out to big drug companies, trying to legalize torture..... There's no end to what these people have done to this country.
 

Disagreeable

Well-known member
passin thru said:
I find it interesting that the left has been complaing about spending under Bush. Yet I am yet to hear any idea of how they want to cut spending.
I am sorry a bash Bush post won't do it..........let's see some real cuts and figures.

Waiting and have been.

Let's start with $2Billion a week that we're spending in Iraq. Think of what that could do for this country. Roads, bridges, education, medical research.....
 

P Joe

Well-known member
Disagreeable said:
[
Clinton worked with a Republican House and got the Federal deficit left to him by three terms of Republican presidents under control. There were some hard decisions made, but spending bills originate in the House, and not the White House. So the Republican House gets the same credit for cutting defense as Clinton.

Clinton left a better legacy than tens of thousands dead, half the world now our enemy, trillions $$ of debt. Yeah, I'll take that dirty skirt any time. The White House has been trashed by the Bush Bunch. Their lies that led us into Iraq, their illegal wiretapping of the American people, their sell out to big drug companies, trying to legalize torture..... There's no end to what these people have done to this country.

Well then I guess we Should give some credit to the House then for such a balance budget? Which would make Clinton not such a bright man.

Was it not Clinton that let Osama go. If you give credit where credit is due, can we then blame Clinton for creating this mess?
 

Econ101

Well-known member
What would happen if insurance companies used this kind of accounting? Money in from premiums is just earnings with no liability for the insurance contracted.

We have had such a bad run of politicians who can't govern and hide the truth that it is just pitiful.

If they don't like the truth, they just sugar coat it and sell it anyway. Then they pawn off the bad stuff to the states with unfunded mandates.
 

Steve

Well-known member
Econ101:
What would happen if insurance companies used this kind of accounting? Money in from premiums is just earnings with no liability for the insurance contracted.

you mean like they did in New Orleans and many natural disaters before that?

Insurance companies often find ways to avoid liabilities.
 

Disagreeable

Well-known member
P Joe said:
Disagreeable said:
[
Clinton worked with a Republican House and got the Federal deficit left to him by three terms of Republican presidents under control. There were some hard decisions made, but spending bills originate in the House, and not the White House. So the Republican House gets the same credit for cutting defense as Clinton.

Clinton left a better legacy than tens of thousands dead, half the world now our enemy, trillions $$ of debt. Yeah, I'll take that dirty skirt any time. The White House has been trashed by the Bush Bunch. Their lies that led us into Iraq, their illegal wiretapping of the American people, their sell out to big drug companies, trying to legalize torture..... There's no end to what these people have done to this country.

Well then I guess we Should give some credit to the House then for such a balance budget? Which would make Clinton not such a bright man.

Was it not Clinton that let Osama go. If you give credit where credit is due, can we then blame Clinton for creating this mess?

We should give the Republican House some credit for the fiscal balance sheet left to us by Clinton. But when you realize he was under investigation for every move he made the entire remainder of his term and still was willing to work with the House, I think he wins. ROTFLMAO! Clinton is a very, very smart man. One of the things that makes Hillary such a strong candidate is that she has him on her side. And she's pretty smart, too.

It was Ronald Reagan who pulled our troops out of Beruit after their barracks were bombed. Didn't that show the terrorists that Americans won't stand and fight? But no right winger wants to talk about that. Reagan funded Bin Laden, among other "freedom fighters" against the Russians in Afghanistan. Would he have been strong enough to launch the 9/11 attack without that earlier support?
 

Econ101

Well-known member
Steve said:
Econ101:
What would happen if insurance companies used this kind of accounting? Money in from premiums is just earnings with no liability for the insurance contracted.

you mean like they did in New Orleans and many natural disaters before that?

Insurance companies often find ways to avoid liabilities.

Insurance companies have to state their liabilities on their balance sheet. That includes what they are contractually liable for.

The U.S. does not count future liabilities they incur in their current year. They operate on a cash basis (or borrowing basis) that only counts current year inputs and outputs, not liabilities they create. This allows the budget deficit to seem much smaller than it actuarily is.
 

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