USA hides trillions in debt

[candygirl]

This story can be found on page >U.S. government tricks hide trillions in debt

 

U.S. government tricks hide trillions in debt

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

 

By Scott Burns

November 21, 2007

When it comes to financial magic, the government of the United States takes the prize. Sleights of hand and clever distractions by purveyors of line-of-credit mortgages, living-benefit variable annuities and equity-indexed life insurance are clumsy parlour tricks compared with the Big Magic of American politicians.

 

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

 

But politicians of both parties use happy numbers to distract American voters. Democrats routinely criticize the Republican administration for crippling deficits, but they politely use the least-damaging figure, the $162.8 billion. Why? Because references to more-realistic accounting would reveal vastly greater numbers and implicate both parties.

 

You can understand how this is done by taking a close look at a single statement on U.S. federal finance from the president's Council of Economic Advisers. The September statement shows that the "on-budget" numbers produced a deficit of $344.3 billion in fiscal 2007. The "off-budget" numbers had a surplus of $181.5 billion. (The off-budget figures are dominated by Social Security, Medicare and other programs with trust funds.)

 

Combine those two figures and you get the unified budget, that $162.8 billion. In the past eight years there's been two years of reported surpluses and six years of reported deficits. Altogether, the total reported deficit has run $1.3 trillion.

 

Some numbers don't add up

But if you examine another figure, the gross U.S. federal debt, you'll see something strange. First, the U.S. debt has increased in each of the past eight years, even in the two years when surpluses were reported. Second, the gross federal debt, which includes the obligations held by the Social Security and Medicare trust funds, has increased much faster than the deficits -- about $3.3 trillion over the same eight years.

 

That's $2 trillion more than the reported $1.3 trillion in deficits over the period. Can you spell "Enron"?

 

In other words, while the reported deficits averaged $164 billion over the past eight years, U.S. government debt increased an average of $418 billion a year. That's a lot more than twice as much.

 

How could this happen?

 

Easy. The U.S. Treasury Department simply credits the Social Security, Medicare and other trust funds with interest payments in the form of new Treasury obligations. No cash is actually paid. The trust funds magically increase in value with a bookkeeping entry. It represents money the American government owes itself.

 

So what happens if the funny money is taken away?

 

When the imaginary interest payments are included, Social Security and Medicare are running at a tranquilizing surplus (that $181.5 billion mentioned earlier). But measure actual cash, and the surplus disappears.

 

In 2005, for instance, the U.S. Social Security Disability Income program started to run at a cash loss. 2007 is the first year that Medicare Part A (the hospital insurance program) benefits exceeded income.

 

The same thing will happen to the U.S. Social Security retirement-income program in six to nine years, depending on which of the trustees' estimates you use. During the same period, the expenses of Medicare Part B and Part D, which are paid out of general tax revenue, will rise rapidly.

 

Despite this, the U.S. Social Security Administration writes workers every year advising them that the program will have a problem 34 years from now, not six or nine years. In fact, the real problem is already here. It will be a big-time problem in less than a decade.

 

Count on it.

[ESCANDAL0SA]

not surprising.

[MISTY_DAWN]

oh noes!

[NBVegita]

All governments are run that way. It's just that our government allows the people to question more, and find out more.

 

This is of course another clevery disguised social security scare. Economists have been crying that social security is going to dry up in X (insert number under 10) years since the 70's. Not that I'm expecting it by the time I retire.

 

Either way I wouldn't have been surprised if that report said we were actually over 10 trillion in debt.

[Death+]

http://www.t-shirthumor.com/Merchant2/graphics/fullsize/hbbl_lg2.gif

[Falcoknight]

Is the topic a joke?

Hiding the national debt?

If they're trying to hide it, they've done a !@#$%^&* horrible job.

Last I knew it had reached a little over 9.1 trillion dollars.

 

I wrote a pretty lengthy research paper on the national debt several years ago (The debt was only a little over 7 trillion then. (As if I just used the word "only" while talking about trillions of dollars))

 

The information isn't being hidden, as this article suggests. It's very easy to find, in fact.

It's not that it's being hidden, it's just being completely ignored.

[Aileron]

Nice one, Falco.

[Hoch]

I felt somewhat conflicted when I read this article.

Mainly because it conflicts with the figures sighted

by Alan Greenspan in his autobiography.

 

To that extent, there is a marked difference between

the federal debt to the public and amounts that are

reducible.

 

My instincts tell me to believe the man that held

the US economy in his hands, rather than the

author of this article. Yet one cannot ignore the

fact that the US needs to pay down the debt, no

matter what level it is at.

 

 

-Hoch

[ThunderJam]

Hoch spaces his posts weird...

[rootbear75]

8 years ago was the final years of the clinton administration

Clinton was a far superior president than bush ever was or will be

we had a surplus (afaik) for all of the years clinton was in office.

as soon as bush came in, he pissed it all away

[Falcoknight]

If I remember correctly, even though Clinton ended his presidency with a surplus, during his time in office the national debt still increased by around 2 trillion dollars, which, while less than it has increased under Bush by a long shot, was still an incredibly massive increase in the debt. The difference was Clinton's spending decreased as his time in office went on, most of that debt ac!@#$%^&*ulated happened in the first few years of his presidency, then slowed down massively in his second term.

With this president, however, the spending has not decreased at all really, yet there are different cir!@#$%^&*stances now then there were in the late 90s. Like a war draining massive amounts of money.

[JDS]

please, Clinton wasnt that great.. A pres is only as good as the people who tell him what to do

 

 

there is going to come a time when usa just gets desperate, gets rid of there currency and tries to make a new one -ignoring all debt.. the thing with PAPER money is this.. its just paper you can toss it out and grab more. the usa knows this and are going to exploit there paper money as much as they can.

[Hoch]

The Clinton years were marked by budget surpluses

(1998 - 2001). However, there were many reasons

why this was so.

 

The first, and most obvious, was the tax increases

that Clinton pushed through Congress in 1993 and

1994.

 

Secondly, when the Republicans took over Congress

in 1995 they and Clinton agreed to curtail spending.

 

Thirdly, there were increased net flows of tax revenue

due to the rising stock market. However, when the

dot.com bubble burst in 2000 a lot of that evaporated

over night.

 

As to why the Bush Administration has not generated

budget surpluses, the reasons are also quite obvious.

 

Firstly, the wars in Afghanistan and Iraq.

 

Secondly, and related to the first, Bush had to spend

extra money on military hardware because the Clinton

Administration had reduced spending for defence.

 

Finally, Bush pushed through a $1.3 trillion tax cut.

 

The budget surpluses forecasted by the CBO had to

be revised when Bush's expenditures were taken into

account. Needless to say, the overall budget deficit is

beginning to come down. But the national debt, under

both presidents, has not yet been paid down substan-

tially. That is the greatest cause for concern.

 

 

-Hoch

Edited November 27, 2007 by Hoch

[Aileron]

If I recall correctly, the biggest chunk of the national debt goes to welfare programs. Generally, the kinds of programs which really help nobody, but would be political suicide to vote against. The most recent near-example was Schips, which I can best describe as "P!@#$%^&* our pork for the children's sake". If Bush wasn't a lame duck, he would have passed the bill and we would have generated another billion or two in debt which no doubt would never have reached any child's hands. Usually that's how it goes. Some bill proposer comes up with a bad idea, cites some heartwarming problem, and then all politicians have to vote for it because if they didn't they'd look like a jerk.

 

 

Also, people need to realise the government money isn't free. If government money isn't helping !@#$%^&* near everyone, it shouldn't be spent. Let the charities handle the poor.

 

 

It might also be worth considering putting tarrifs on imports.

 

 

JDS, you do realise that paper money has to be backed, don't you? The oldskool idea on the subject was that for every dollar the US Mint produces, there is an amount of gold in Fort Knox which that dollar represents. After a while they started including silver and other commodities, and in modern times they started backing it with a lot of goofy things. Still, all money has to be backed by something.

[SeVeR]

Paper money is backed by nothing except the debt it produces. The biggest debt contributer is the war, not welfare. The poor countries are in debt to the big countries, thus enabling the rich to continually limit the poor's capacity to become rich. The rich countries are in debt to the international banks, thus allowing the banking ins!@#$%^&*utions to remain the most powerful political and economic force in the world. The Federal Reserve is not a Federal ins!@#$%^&*ution, it has nothing to do with the state, it is a private bank which can lower or increase interest rates and cripple the stock markets at their disgression. I think it was around 1917 when the Federal Reserve became the "Not Really Federal" Reserve, and from that point the world was not in the control of elected governments. Believe it or not, we're going backwards as far as political systems are concerned.

 

The currency rate might be hard on US importers, but think about how well exporters are doing in the US. Everyone will want to get supplied by the US thanks to their cheap currency.

 

Let the charities handle the poor? Charities are even worse at helping people, and usually take a larger slice of the money they gather for themselves. But then that's probably what extreme conservatives want, most of them set up charity funds for the little bit of money on the side it generates.

[Hoch]

The US Federal Reserve main task is to curb

the rise of inflation or prevent deflation...

 

 

-Hoch

[NBVegita]

Hoch, well put in your last post.

[Aileron]

Sure SeVeR...everyone in the world is evil except you and Iran. Bush is evil. The Federal Reserve is evil. The entire nation of the United States is evil. The Pope is evil. Charities are evil. But Ahmenijad's gonna be the savior of the human race.

 

I won't argue that the Federal Reserve doesn't have more power than it should have, but...go back and read the things you've written. You act like the world's a misrable place that's doomed to blow up in a couple years. Your senses seem to have been twisted by hate so much that you can't tell up from down.

 

I didn't say the war was cheap. I said welfare was worse. However, the biggest factor is general inefficiency. This generally comes from situations which are neither moral nor emotional at which an emotion is !@#$%^&*igned.

 

The first example I can think of this was the famous "Cross of Gold" speech by Bryant, an emotional speech regarding whether or not silver should be used to back currency. The issue was purely economic and financial, and if they had a computer back then, that computer could have determined the correct answer without any regard for morality or emotion.

 

Since then, that's what the government does. When taxes are raised, politicians are "starving the lower classes" while when taxes are lowered they are "giving kickbacks to the wealthy". When discussing insurance, its about poor uninsured children. When the environment is discussed, its about the doom we are inflicting on future generations. Same thing with Health Care, Social Security, energy, or anything regarding safety.

 

All of those issues can be solved empirically, but to do that one would need to consult an expert. But that enters the second part of the emotionalism, because all experts on any subject must either be inept or corrupt because their paycheck is signed by the federal government. Thus, the government doesn't trust its own people to solve problems emprically.

 

And at the end of the day, some blow-hard poltician will simply do what he "feels is right", which works in a lot of issues, but doesn't make good accounting.

 

 

All in all, here's a list of things which need to be done to balance the budget:

 

1) The media needs to start targeting politicians who make emotional issues out of empirical ones. Al Gore should not have received a peace prize for "Spreading Awareness of Global Warming." That particular issue should be discussed by geologists, ecologists, meteorologists, or to be more general "scientists", rather than some wanna-be president who can't even count votes without constantly needing recounts.

 

2) Politicians should be payed more. Yes, that's written correctly. The best government should have the best people running it, and generally the best people are going to do the job that pays them the most. When professional athletes have a higher salary than the president, we have a problem. However, the people we'd like to see in government are business leaders. Donald Trump for instance may be a jerk with what looks like a dead rodent on his head, but the man can balance a budget, and whatever we paid him would get returned thrice over when he gets things running more efficiently.

2b) We need to get rid of most of the lawyers. Too many members of the same profession leads to lack of intellectual diversity.

 

3) Tarriffs. And SeVeR, quit with the bs about the value of the dollar going down. It's not as important as you are making it out to be and you know it.

 

4) Where possible, for any certain function of government, there should be two redundant agencies !@#$%^&*igned to that function, placed in direct compe!@#$%^&*ion with each other.

[SeVeR]

Sure SeVeR...everyone in the world is evil except you and Iran. Bush is evil. The Federal Reserve is evil. The entire nation of the United States is evil. The Pope is evil. Charities are evil. But Ahmenijad's gonna be the savior of the human race.

 

Iran is an extremely religious country, and i cannot support that kind of regime.

Bush is either stupid or a liar, i'm more swayed to believe the former.

The Federal Reserve is powerful, greedy, and if the full details of what they do were known to the American people, they wouldn't exist. However, they're not evil, they're at the top of the food chain

The people of the USA are not evil.

The Pope i have no idea about, one man doesn't epitemise a religion.

Charities are full of !@#$%^&*, and we'd be better off without them. That's just my opinion, and i won't call them evil (and never did)

Ahmadinejad is the leader of Iran and thus doesn't deserve any special reverence. He is however standing up for his right as a leader to develop nuclear power. Even though i despise religion and Iran's regime, it doesn't cloud my judgement on international politics. Maybe you should be a bit more objective.

 

Now its my turn for a question. Are you thick? Can we have a proper discussion now?

 

You act like the world's a misrable place that's doomed to blow up in a couple years. Your senses seem to have been twisted by hate so much that you can't tell up from down.

Oh God, please tell me where i've shown "hate" in my last post. Seriously WTF!

 

I'm not even gonna read anymore, i have no idea what you've been smoking today Aileron, but it doesn't do much for your debating skills.

Edited November 27, 2007 by SeVeR

[Aileron]

I do !@#$%^&*ure you that the personal shots stopped right after you stopped reading...erm, mostly.

 

But, the bigger question is: Why do you assign different standards of morality to different people? I mean, by any objective standard one would have to put the deeds the Red Cross has done over the deeds Iran's government has done. To criticise the former while lauding the latter would require two seperate standards of morality to be applied to each of them.

 

It seems that to the former, any charity which incurs operating costs so that 100% of the money can't reach the poor should be condemned, but if Iran can come up with a political excuse for their activities, they should be praised.

 

Iran's government has operating costs, and its leaders make money, so by the standard applied to the charities, Iran is also wrong. Charities usually have a political motivation for their actions, so by the standard applied to Iran, the charities are also right. This is morality by "bowling handicap", where an organization is !@#$%^&*igned a base expected performance which is added or subtracted from their true stance.

 

To take offense when I claimed your thoughts were twisted by hate is dangerous. All humans have capacity for hate, myself certainly included. To deny its possibility is dangerous. I myself must admit that I attacked you personally when you criticised charities, and additionally must recognize that it was slightly hypocritical when the content of my post involved the budget problems !@#$%^&*ociated with the over-defensiveness of emotional causes.

 

Still, the "bowling handicap" morality which you cited smells of evil, probably not from you but rather the individuals who came up with the idea. Under such a morality system, no organization on Earth has motivation to improve, only to perform better than usual whenever in the spotlight, infact having motivation to perform immoral actions whenever they won't be noticed, and thus this method of judgement was probably invented by forces who wish to curtail moral development.

[Wild Luck]

I live in the 3rd world and we are in debt since i was in elementals school, we payed it and got more loans to begin the same circle.

 

I think a country needs to get in debt to prosper, of course the ideal thing would be all that money should be used to produce more money and pay the debt, but generally that never happens, at least not here in Dominican Republic.

[JDS]

there is no !@#$%^&*ing thing as 3rd world, 2nd world, 1st world

 

we are one world, one place, one organism. And until people realize this, where royally !@#$%^&*ed.

[rootbear75]

there is no !@#$%^&*ing thing as 3rd world, 2nd world, 1st world

 

we are one world, one place, one organism. And until people realize this, where royally !@#$%^&*ed.

3rd world countries are now called "developing nations"

1st world countries are called "developed nations"

[JDS]

ah yes, i just hate it when people degrade them by calling them 3rd world..

[SeVeR]

Why do you assign different standards of morality to different people? I mean, by any objective standard one would have to put the deeds the Red Cross has done over the deeds Iran's government has done. To criticise the former while lauding the latter would require two seperate standards of morality to be applied to each of them.

Good question, but it's not standards of morality, it's standards of status.

 

Iran is a religious country, but so are alot of other countries. They don't commit human rights offences, they don't attack other countries, they don't attack their own people. Yet they have a status, developed largely by the western media, as some sort of evil, terrorist breeding, jew hating, nuke building, war-mongering bunch of racist Christian killers. So i have a problem with that status. Jews are welcome and feel welcome in Iran (largest population in the Middle East apart from Israel). Iran co-operates with the IAEA on the nuclear issue, and this representative agency of the UN has even said there is no evidence whatsoever of nuke-development. They haven't invaded any other countries and they're a peaceful state.

 

Charities have existed for years and always end up doing more harm than good. Have you ever had a bird-feeder in your garden? The birds will use it and become dependent, just like the people in Africa do. They lose their capacity to help themselves in what little way they can by taking whats given to them. Now ask yourself if charities tend to help people out of poverty? Typically, no. They have food for a month, they bring another starving child into the world, the problem gets worse, they go back into starvation. Charities don't help people, they prolong the misery. If the weak are too weak to stay alive then let them die, and if you want to help them, then help them to help themselves. I believe in empathetic acts, but only when that smiling face will still be smiling in 50 years.

 

Charity is deemed to be the ultimate good, but it's clear to me that it's incredibly pernicious if it's just for the sake of believing you're doing a good thing. Charity has to be interpreted with a survivalist at!@#$%^&*ude: i.e. help the weak to become strong, so that you may have a strong ally.

 

Iran is deemed to be the ultimate evil, but it's clear to me that their image is greatly exagerated. I feel that image is being used to unfairly restrict their advancement. I dislike their mixture of government and religion, and i dislike their laws, but i'm not going to let that bias my judgement of what the other side is doing.

 

So it's an objection to status. Things are not the way they're made out to be.

 

To take offense when I claimed your thoughts were twisted by hate is dangerous. All humans have capacity for hate, myself certainly included.

I've come to understand that everything has a purpose, even religion, even corruption. If you see the world through what i call 'survivalism', then you'll see that the bankers who hold a noose around America's kneck are not "evil", they're simply doing what they can to remain number one. Surely then it is our natural duty to topple them from their position, and do exactly the same thing, but better. It's not evil, it's survival.

 

So i couldn't really say that i hate anything, just like i couldn't call anything evil. It's beyond good and evil. If someone were to threaten my life, i'd kill them, i wouldn't hate them, and i probably wouldn't have any qualms about doing it either. Hate just seems so... irrelevent.

 

Survivalism may seem harsh and selfish but consider this: In a world of war, anger and hatred, survival is more difficult.