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The Real Deficit Calamity

Friday, December 12, 2003
The Real Budget Deficit $1.4 Trillion 2nd Qtr 2003
Conventional wisdom holds that the fiscal policies of  the Clinton Administration produced a $236 billion surplus for FY 2000.  A big lie.

Actually,  there was  a $137.6 billion deficit. 

The Clinton/Bush fiscal policies produced a 2001 deficit of $623.8 billion. At the end of CY 2002, government borrowing raced along at an annual rate of $814.9 billion. And, this year the current annual rate of borrowing to finance the deficit was, at the end of the 2nd quarter, $1.348.6 trillion.  At the end of the 1st quarter of 2003 it was only $531.9 billion. At years end the deficit will approach $2 trillion.

I know this sounds implausible, but if you have a computer go to

www.federalreserve.gov/releases/Z1 

Click on 'Current releases' , then click on 'Flows tables (171 KB PDF)' then scroll down to table F4 'Credit Market Borrowing, All Sectors, by Instrument.'

Please, check line 3 'U.S. government securities.' This is irrefutable evidence of the amount of  borrowing needed to finance the operations of the Federal Government.  This is the real world deficit

The huge discrepancies, between the Treasury and the Fed budget numbers, occur when the Treasury employs a series of accounting manipulations.

First, the Treasury takes all the debts  of agencies like Freddie Mac, Sallie Mae, Federal Home Loan Bank Board and other agencies that are guaranteed by the Government, and classifies their debt as U.S. Government Securities.  However, these agency budgets are never consolidated with the Treasury accounts so they don't get reflected in the Budget Deficit.

The Federal Reserves' numbers have never been used by any Administration because they are so damaging to the image of the Administration. Table F4 reveals the amount actually borrowed in new money over and above refunding of past debt for eash calendar year.  The money is used soley to finance the deficit.

Second, there is the abuse of the Social Security Trust Fund (SSTF).  These funds are now in surplus, and are intended for the 50-60 million current and near-term retirees. These surpluses should never be used as a fungible resource in the operation of the Federal Government.  Yet, Administration after Administration has used them to hide all or a portion of the deficit.  Instead of just moving numbers around the Federal Government takes the earmarked cash and actually spends it on government operations.

The consequences of massive securities borrowing/raiding the social security surplus will soon show up in higher mortgage rates, and the bankruptcy of the SSTF, along with a crash in corporate and Treasury bonds.

It would be helpful if the mainline press really reported  the true deficit to American taxpayers instead of accepting the spoon feeding exercises conducted by past and current administrations.  Particularly, when the real, 2003, 2nd quarter deficit reported by the Federal Reserve was $1.348.6 trillion three times the levels announced by the White House, CBO, and others who are in on the cover-up.

 

posted by Cebes on December 17, 2003 at 7:43 PM | link to this | reply

Bush In general (no pun intended)

 

Hangover

 

Next year is the federal election. I know because I just watched George W. (Top Gun) Bush land on an aircraft carrier for a photo op. Perhaps he is reprising his days during the Viet Nam war when he was protecting the dangerous skies over Houston, Texas when he actually showed up for work.

 

The President has been given high marks for the war. Why? America’s military is the most lethal in the history of the world, so lethal that Forrest Gump or Bill Clinton could have led it with the same result. I know George Bush wants the credit but let’s face it; he started the war then stepped aside so the military could do their job, thank God.

 

America’s economic hangover is now and it’s Bush’s fault. Since Bush became President, poverty among black children has jumped 50%, the minimum wage is $5.15 per hour but plan on living indoors and you’ll need $10.70 per hour. Since George Bush took office the stock market has plunged 5 trillion dollars. There are 2 million fewer jobs now than when George Bush took office. 43 million Americans have no health insurance; if you include people that have inadequate health insurance the figure is nearly 75 million Americans. The national dept has increased by 1 trillion dollars. Unemployment is at a 10-year record high. The surplus is gone!

 

Yea but didn’t he just look great in his flight suit? If I need to feel good I’ll rent “Top Gun” or “Forrest Gump”. It’s cheaper and frankly we don’t need either in the White House. What we do need is someone to focus on our domestic problems. These problems can’t be blown away with a GPS guided bomb no matter how good it makes us feel to watch it on television.

posted by Mhickmott on May 3, 2003 at 8:22 PM | link to this | reply

ONE WORD HERE

AGREE

posted by okohiored on April 5, 2003 at 7:58 AM | link to this | reply