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  1. #1
    Senior Member AirborneSapper7's Avatar
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    May 2007
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    The Real Obama Budget Deficit For 2011: 5 Trillion Dollars

    The Real Obama Budget Deficit For 2011: 5 Trillion Dollars

    May 24th, 2012

    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 U.S. government does not count promises to pay later when calculating budget deficits.

    The "official" Obama budget deficit for 2011 was 1.3 trillion dollars, but according to USA Today when you add in the rise in liabilities for Social Security, Medicare and other retirement programs that adds another 3.7 trillion dollars to the total.

    Those are future financial promises that we have made that future taxes are not expected to cover. This analysis by USA Today squares very well with what analysts such as John Williams of have been saying for years. The truth is that our federal budget deficits have actually been far worse than we have been told.

    If the U.S. government was a publicly traded stock, it would be forced to use GAAP - Generally Accepted Accounting Principles.

    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.

    A U.S. household's median income is $49,445, the Census reports.
    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.

    Right now, the mainstream media in the United States is freaking out about the "fiscal cliff" that we are approaching in 2013.

    In essence, a bunch of tax cuts are scheduled to expire and a few spending cuts are scheduled to kick in.

    Everybody is deeply concerned about what such "austerity" could do to the struggling U.S. economy.

    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.

    That is what "austerity" does. It causes economic growth to slow down. Just look at Greece. They have had five years of austerity and now they are in a full-blown economic depression.

    But can we really afford to continue stealing trillions of dollars from future generations just to make short-term economic conditions better?

    This is what I wrote about the other day. The U.S. economy has not stabilized because Obama is an economic genius. It has stabilized because he has stolen trillions of dollars from future Americans in order to make the economy look better in the present.

    This was explained further in a recent article by Peter Schiff....

    From 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 U.S. GDP expanded by $502 billion, and from 2011 to 2012 it added an additional $508 billion. All told, from the end of 2008 the U.S. economy added a cumulative $798 billion in GDP. But those gains came at a very high price.

    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.
    We don't have real economic growth in America today.

    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.

    So where in the world is the U.S. government getting all of this money?

    Well, the truth is that most of it appears to be coming from the Federal Reserve.

    During 2011, the Federal Reserve bought up approximately 61 percent of all government debt issued by the U.S. Treasury Department.

    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.

    Most Americans just assume that we will have prosperity forever because that is what always happens in America.

    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.

    The Real Obama Budget Deficit For 2011: 5 Trillion Dollars
    Last edited by AirborneSapper7; 05-28-2012 at 02:57 AM.
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  2. #2
    Senior Member AirborneSapper7's Avatar
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    South West Florida (Behind friendly lines but still in Occupied Territory)
    Obama's Five Trillion Dollar Lie

    May 21st, 2012

    Why isn't the U.S. economy in a depression right now?

    The number one reason is because the federal government has stolen more than five trillion dollars from future generations since Barack Obama was elected and has used that money to pump up our grossly inflated standard of living.

    Whether the federal government spends money wisely or foolishly, the truth is that the vast majority of it still ends up in the pockets of the American people who then use it to buy the things they need for their daily lives.

    If the U.S. government had not borrowed and spent an extra five trillion dollars that we did not have over the past several years, we would be in the middle of a rip-roaring economic depression right now.

    So any talk that Barack Obama is "improving the economy" is a total farce.

    It is a five trillion dollar lie.

    The reality is that Barack Obama and the U.S. Congress have been stealing trillions of dollars from future generations in order to make things tolerable in the present.

    If the federal government adopted a balanced budget next year, the debt-fueled prosperity that we are currently enjoying would start disappearing very rapidly and all hell would break loose in America.

    At this point, the U.S. national debt is over 15.7 trillion dollars.

    When Ronald Reagan took office it was less than a trillion dollars.

    If you were to divide the national debt up equally, it would come to more than $50,000 for every man, woman and child in the United States.

    So the share of the national debt for an average family of four would be about $200,000.

    When the government borrows and spends money that it does not have, that increases the amount of dollars in circulation and it causes GDP to go up.

    That is one of the reasons why our politicians like to borrow and spend money that we do not have. It makes the economic statistics look good.

    They can point to those economic statistics as a reason to send them back for another term.

    This is a major flaw in our system. Most of our politicians do not care about how they are raping future generations financially. Most of them just care about getting elected again.

    If you will notice carefully, neither Mitt Romney nor Barack Obama are promising to balance the budget any time soon. Like so many politicians in the past, they promise to do it "eventually", but "eventually" never arrives.

    According to a recent article in the Washington Times, Mitt Romney declared during a recent campaign appearance that he has no plans to balance the federal budget in his first year....

    "My job is to get America back on track to have a balanced budget. Now I'm not going to cut $1 trillion in the first year"
    Why would he say that?

    Why wouldn't he want to balance the budget?

    He went on to explain that....

    "The reason," he explained, "is taking a trillion dollars out of a $15 trillion economy would cause our economy to shrink [and] would put a lot of people out of work."
    Romney is right about this. Taking a trillion dollars out of a 15 trillion dollar economy would plunge us into an economic nightmare.

    And that would make him look bad.

    Of course if Obama wins the election we can just expect more of the same from him as well.

    For example, just check out what White House Chief of Staff Jack Lew had to say about balancing the budget recently....

    “The time for austerity is not today,” Lew told NBC News “Meet the Press.” “If we were to put in austerity measures right now, it would take the economy in the wrong way.”
    Why is the time for austerity not today?

    It is because the 2012 election is coming up and Obama wants the economic statistics to look good.

    But can you blame our politicians for being cowardly?

    Just look at what is happening in Greece. After several years of austerity they are in the midst of a full-blown economic depression and they still have not balanced their budget.

    Do we want to end up like Greece?

    Most Americans do not realize this, but the U.S. already has more government debt per capita than Greece, Portugal, Italy, Ireland or Spain.

    So why haven't we collapsed yet?

    Well, because we continue to borrow larger and larger amounts of money.

    It took from the founding of America until 1995 for the federal government to accumulate 5 trillion dollars of debt.

    Under Obama, we have accumulated more than 5 trillion dollars of new debt in just over 3 years.

    Amazingly, Obama has added more to the national debt than George W. Bush did during his entire 8 year term.

    And let there be no mistake - George W. Bush was a wild spender. A fiscal conservative he most certainly was not.

    But Barack Obama does not seem troubled by any of this.

    Barack Obama is prancing about the countryside touting his great "economic plan", but the truth is that the only reason the economy has not totally collapsed is because he is stealing 150 million dollars an hour from our children and our grandchildren.

    Sadly, most Americans don't understand that the current level of prosperity that we are enjoying is a grand illusion. Most Americans still expect things to return to the way that they used to be, and they are increasingly becoming angry that it is taking so long to get back there.

    In fact, a whole host of recent surveys have shown that Americans are very dissatisfied with the direction the economy is heading in....

    Four recent surveys have found that on average only 28% of Americans are satisfied with the condition of the country, while 70% are dissatisfied. Three recent surveys have found that between 69% and 83% of Americans believe that the country is still in recession (it isn’t), and only half believe that a recovery is under way.
    What they don't realize is that if we were not massively ripping off our kids and our grandkids things would be much, much worse.

    Thomas Jefferson understood that government borrowing is essentially the same as theft from future generations.

    He once made the following statement....

    And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.
    What we are doing to our children and our grandchildren is so immoral that it is hard to put into words.

    We are running up trillions upon trillions of dollars of debt in their name just so that our lives can be more comfortable right now.

    How could we be so selfish?

    The sad thing is that even with all of this reckless spending our economy is still not in great shape.

    In fact, the middle class continues to shrink at an alarming rate. The following are just a few statistics from a recent article I did about this phenomenon....

    -Today, approximately 48 percent of all Americans are currently either considered to be "low income" or are living in poverty.

    -Back in 1960, social welfare benefits made up approximately 10 percent of all salaries and wages. In the year 2000, social welfare benefits made up approximately 21 percent of all salaries and wages. Today, social welfare benefits make up approximately 35 percent of all salaries and wages.

    -The United States actually has a higher percentage of workers doing low wage work than any other major industrialized nation does.

    -Every year now, we see millions of Americans fall out of the middle class. In 2010, 2.6 million more Americans descended into poverty. That was the largest increase that we have seen since the U.S. government began keeping statistics on this back in 1959.

    -At this point, approximately 22 percent of all American children are living in poverty.

    -When Barack Obama took office, there were 32 million Americans on food stamps. Now, there are more than 46 million Americans on food stamps.

    So how much worse would things be if a trillion dollars of federal spending was suddenly removed from the economy?

    Are you starting to get the picture?

    As bad as things are right now, they are about to get a whole lot worse.

    So why can't we just keep on borrowing and spending forever?

    Well, just like Greece found out, debt always catches up with you eventually.

    During fiscal 2011, the U.S. government spent over 454 billion dollars just on interest on the national debt.

    But just like we are seeing in Europe, if confidence in U.S. government debt starts to disappear the U.S. government could end up facing much higher interest rates to borrow money.

    If the average rate on U.S. government debt only rose to 7 percent (in the past it has actually been much higher than that), then the U.S. government would be spending about 1.1 trillion dollars a year just on interest on the national debt.

    During fiscal year 2011, the U.S. government spent 3.7 trillion dollars but it only brought in about 2.4 trillion dollars.

    So if we were spending 1.1 trillion dollars just on interest, that would be close to half of all the revenue the federal government brings in.

    Right now, the Federal Reserve is manipulating the system in a desperate attempt to keep interest rates down. During 2011, the Federal Reserve bought up approximately 61 percent of all government debt issued by the U.S. Treasury Department.

    But most Americans have no idea how fragile our financial system is.

    Most Americans just assume that we will always be the greatest economy on the planet and that there is nothing to be worried about.

    Sadly, one way or another this debt bubble is going to burst and then our debt-fueled false prosperity is going to disappear.

    Most Americans are not going to understand what is happening and they are going to go absolutely nuts.

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    Obama’s Five Trillion Dollar Lie
    Last edited by AirborneSapper7; 05-28-2012 at 03:55 AM.
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  3. #3
    Senior Member 4thHorseman's Avatar
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    May 2006
    Gulf Coast
    Remember that the Democrats are trying to mask this by claiming relatively small increases in the 2010, 2011, and 2012 Continuing Resolution budgets. Problem is, the 2010 CR budget included not only the initially approved 2009 budget, but nearly 1 trillion dollars in additional spending (stimulus, tarp, omnibus bill, etc.). These were to be one time expenditures, but because the Democrat Congress and Senate have blocked passage of any formal budget since 2009, the expenditures from the preceding budget year get included in the new Continuing Resolution budget. So, instead of spending over a trillion dollars on Stimulus, Tarp, and the half billion dollar omnibus spending bill one time in 2009, those expenditures have been rolled into the 2010, 2011, and 2012 CR budgets, accounting for at least 3 trillion dollars in additional spending over and above the 2009 approved budget with Obama add-ons. But neither the Democrats or Republicans could find any legitimate cuts when the debt limit debates occurred. I don't know who is more disgusting, Reid & Pelosi or Boehner & McConnell.
    "We have met the enemy, and they is us." - POGO

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