World Net Daily Shocker: Deficit 3.5 Trillion

[Donkey®]

Anyone have another source for this? WND is like the Special Olympics of sources.

My opinion: If true, there's a lot of lying going on in this administration.


WorldNetDaily: True deficit: $3.5 <i>trillion</i>

Originally Posted by article

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

(Story continues below)

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."

A quick study of the following table Williams has posted on his website shows the alarming nature of the Bush administration federal budget shortfalls when GAAP accounting methods are used and all Social Security and Medicare liabilities are fully realized.



Source: John Williams, Shadow Government Statistics, on ShadowStats.com

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.

[hsmith]

uh, this isn't just a bush thing, this is every president for the last 80 years

[Donkey®]

Originally Posted by hsmith

uh, this isn't just a bush thing, this is every president for the last 80 years

Lincoln is not the current President. I kind of like to keep up with the times. What BUSH does is more important than what someone else did 100 years ago...or 68 years ago. Also, "Clinton did it" has already been destroyed as an excuse for Bush doing what he does.

[6SpeedTA95]

The mainstream media wont report it because its a fallacy, plain and simple. This years federal budget deficit is 248 billion...it is IMPOSSIBLE to have federal budget deficit higher than the budget itself.

[ballz2wallz]

Questionable source.

[6SpeedTA95]

Originally Posted by ballz2wallz

Questionable source.

Of coures it is, and its a ridiculous article. No formula's no map on how he arrived at those conclusions and he wants to talk about shadow statistics? This is ridiculous if you could analyze his data you'd find out there this is a joke, he strung out some numbers for multiple years or he is just flat lieing.

[DosEquis]

I think he is wrong. While there is an actual deficit and the deficit they report, it is not any where near 3.5 trillion dollars. While we say we have a 248 billion deficit for the year, it is probably around 350 after the unbudgeted "emergency" spending they don't include... such as the entire Iraq war fund that is not included in the budget.

[6SpeedTA95]

Originally Posted by DosEquis

I think he is wrong. While there is an actual deficit and the deficit they report, it is not any where near 3.5 trillion dollars. While we say we have a 248 billion deficit for the year, it is probably around 350 after the unbudgeted "emergency" spending they don't include... such as the entire Iraq war fund that is not included in the budget.

You hit the nail on the head, when doing a budget deficit for a yearly basis you have to base it on cash flow, this extended analysis bullshti is just that bullshit.

You hit the nail on the head Dos.

[DosEquis]

I am not sure where he gets the social security stuff from either. To my knowledge we have a positive balance of 1.8 trillion in the SS fund that is still growing slowly. Also, we are still at about 3:1 ratio for those paying in vs. those drawing benefits. Though the government does steal from this fund so that it can still spend out of control and cut taxes at the same time, it will ultimately be the primary reason that SS is lead to its demise. Al Gore was on to something with his "lock box". It just also shows that tax cuts are not responsible unless the spending is cut by the same percentage the income drops to maintain a balanced budget. Then as tax revenues start to increase again the budget can go along accordingly. Or if they were true conservatives they would not increase the budget by the same % as revenue and save some to pay down our national debt...and save some for things like katrina.. so we aren't going backwards all the god damn time. Unfortunately that makes way to much sense and would never fly.

On a seperate tangents..
It is why it leads me to believe they are spending on purpose. They want to get rid of entitlement programs, social security, medicare, etc. What better way to get rid of them than be forced to because we have so much debt we simply can't afford it anymore?

[6SpeedTA95]

Originally Posted by DosEquis

I am not sure where he gets the social security stuff from either. To my knowledge we have a positive balance of 1.8 trillion in the SS fund that is still growing slowly. Also, we are still at about 3:1 ratio for those paying in vs. those drawing benefits. Though the government does steal from this fund so that it can still spend out of control and cut taxes at the same time, it will ultimately be the primary reason that SS is lead to its demise. Al Gore was on to something with his "lock box". It just also shows that tax cuts are not responsible unless the spending is cut by the same percentage the income drops to maintain a balanced budget. Then as tax revenues start to increase again the budget can go along accordingly. Or if they were true conservatives they would not increase the budget by the same % as revenue and save some to pay down our national debt...and save some for things like katrina.. so we aren't going backwards all the god damn time. Unfortunately that makes way to much sense and would never fly.

On a seperate tangents..
It is why it leads me to believe they are spending on purpose. They want to get rid of entitlement programs, social security, medicare, etc. What better way to get rid of them than be forced to because we have so much debt we simply can't afford it anymore?

I actually agree with your theory about spending to force the entitlements to either disappear or become drastically cutback...I've pondered that many times.

[RMNIXON]

I don't like this much debt. That is the true fiscal conservative in me. And I don't like interest payments! Ask my credit card companies! But the debt as a percentage of GDP/GNP is not something we can't keep up with. All debt amount is a measue of your worth, not the size of the number. Go to a bank and find out!

Entitlement spending is what will "clean our financial clock" in the future....

[DosEquis]

By the time bush is gone we will have to spend 400 billion a year on interest, thanks to your boys reagan, bush, and bush. We spend 445 billion on defense, more than the entire world combined. We spend 100 billion a year on Iraq and probably will for the next 3-6 years. Thats 945 billion dollars... and defense spending is increasing damn near as fast as entitlement spending. I think it is safe to say we are cleaning our clock from every angle.

Just imagine the tax cut we could have if we didnt have 400 billion a year in interest.

[RMNIXON]

Originally Posted by DosEquis

By the time bush is gone we will have to spend 400 billion a year on interest, thanks to your boys reagan, bush, and bush. We spend 445 billion on defense, more than the entire world combined. We spend 100 billion a year on Iraq and probably will for the next 3-6 years. Thats 945 billion dollars... and defense spending is increasing damn near as fast as entitlement spending. I think it is safe to say we are cleaning our clock from every angle.

Just imagine the tax cut we could have if we didnt have 400 billion a year in interest.

Ahem, you left out that Clinton debt before the 94 Congress came into power, but I still want to give him credit.

I would also go back and do your homework on both current and projected entitlement spending and the defence budget? We don't know what the ups and downs of future military needs will be? But we know the steady growth of entitlements and the baby boomers who will drain your wallets!

http://www.house.gov/budget/update090804e.pdf

http://www.house.gov/budget/update090804s.pdf

Bush will be long gone by then!

[6SpeedTA95]

I find it hard to believe we spend more than the rest of the world combined on defense, and secondly we can in know way know that since we do not know what China is spending on defense. The Chinese government has only revealed about 90billion a year in defense spending but CIA estimates put that real number between 180 and 220 billion a year.

[DosEquis]

Originally Posted by Nixon

...

Sir, we accumulated 1 trillion from 1776-1980. That included wars like vietnam, korea, the cold war, ww2, and all the other misc conflicts.

Reagan and Bush took it from 1 to 5.5 trillion.. an addition of 4.5 trillion in 12 years.

Clinton went from 5.5 to 6.5 trillion.. and addition of 1 trillion in 8 years.

Bush will take it from 6.5 to some place between 9.2 and 9.6 trillion.. an addition of roughly 3 trillion in 8 years.

So of our 9.2 to 9.6 trillion in debt, your "conservative" presidents have signed spending bills and signed irresponsible tax cuts which directly contributed to 7.2-7.6 of our 9.2-9.6 trillion dollar debt in 2008.

Those kinds of numbers make clinton look more fiscally responsible, and i actually think he was more responsible than the last three conservative presdients.

As far as growth in entitlements and growth in military spending, they can both be cut and/or controlled. Sure we know entitlements will go out of control if we don't manage them, but we also know the military spending will go out of control if we don't manage it either.

[6SpeedTA95]

Reagan was fiscally responsible, all of the republican proposed budgets were increased significantly by the democrat house/senate in the 1980s. The first budget of 1982 was raised a substantial 128 BILLION dollars by democrats. This was normal practice and the deficit would have been worse had it not been for the line item veto.

edit: the final Reagan budget was increased 198 BILLION dollars by democrats at the time...