‘If the U.S. government used the same
accounting methods that most U.S. businesses use, the real federal budget
deficit for last year would have been 5 trillion dollars instead of 1.3
trillion dollars. So where does the huge difference come from? I
think a simple illustration would be helpful here. When you go shopping,
do you only count the transactions where you use cash, or do you also count the
transactions where you signed on the dotted line and promised to pay
later? Of course you count both of them. Well, the
Sadly, as USA Today explained, the real budget deficit for 2011 would have been almost four times as large as was officially reported if standard accounting practices had been used....
Under those accounting practices, the government ran red ink last year equal to $42,054 per household — nearly four times the official number reported under unique rules set by Congress.
The big difference between the official deficit and standard accounting: Congress exempts itself from including the cost of promised retirement benefits. Yet companies, states and local governments must include retirement commitments in financial statements, as required by federal law and private boards that set accounting rules.
The amount of red ink the federal government ran up in 2011 alone was almost equal to median household income.
How much worse can things get?
Unfortunately, we have become a nation that is completely and totally addicted to debt.
We have no idea how to live within our means.
now, the mainstream media in the
In essence, a bunch of tax cuts are scheduled to expire and a few spending cuts are scheduled to kick in.
is deeply concerned about what such "austerity" could do to the
In fact, we could even enter another recession if something is not done according to the Congressional Budget Office....
Under those fiscal conditions, which will occur under current law, growth in real (inflation-adjusted) GDP in calendar year 2013 will be just 0.5 percent, CBO expects—with the economy projected to contract at an annual rate of 1.3 percent in the first half of the year and expand at an annual rate of 2.3 percent in the second half. Given the pattern of past recessions as identified by the National Bureau of Economic Research, such a contraction in output in the first half of 2013 would probably be judged to be a recession.
Well, yes, if taxes rise and government spending is cut it will probably trigger another recession.
is what "austerity" does. It causes economic growth to slow
down. Just look at
But can we really afford to continue stealing trillions of dollars from future generations just to make short-term economic conditions better?
is what I wrote about the other day. The
This was explained further in a recent article by Peter Schiff....
2008 to 2009 our national GDP (of around $14 trillion) contracted by $212
billion. To prevent any further dips, the government aggressively spent,
borrowing heavily to do so. To the relief of just about everyone, these moves
did stop the nominal contraction. From 2010 to 2011 the
The combined federal deficits for the same time frame come in at a staggering $4.2 trillion! In 2009 alone the feds chalked up a chart breaking $1.4 trillion in debt (the deficit was a mere $161 billion in 2007). In other words, we borrowed five times more than we grew. This “strategy” for growth is no different from an individual who loses half his income, but continues to spend by running up credit card debt. Could this be described as economic growth? But that’s just how we are describing our current economy, and for the large part, expert economists, politicians, investors, and academics all agree.
don't have real economic growth in
What we have is debt-fueled prosperity. Without unprecedented borrowing by the federal government we would be in a full-blown economic depression right now.
where in the world is the
The Fed is doing all of this buying in a desperate attempt to keep interest rates low.
It is a Ponzi scheme that cannot last too much longer.
But most Americans have no idea how close to the edge we really are.
Americans just assume that we will have prosperity forever because that is what
always happens in
They don't bother to look at the man behind the curtain.
They don't bother to notice that Barack Obama is stealing 150 million dollars an hour from our children and our grandchildren so that we can continue to enjoy our inflated standard of living.
Please wake up America.’