Thread: Real U.S. shortfall: $4.6 trillion in red

Real U.S. shortfall: $4.6 trillion in red
'Taxing 100% of all wages, salaries, corporate profits would not eliminate a deficit of this magnitude'

http://www.worldnetdaily.com/news/artic ... E_ID=53413

Posted: December 17, 2006
11:45 p.m. Eastern

By Jerome R. Corsi
© 2006 WorldNetDaily.com

The real 2006 federal budget deficit was $4.6 trillion, not a previously reported $248.2 billion, according to the 2006 Financial Report of the United States Government as released by the Treasury Department Friday.

"The 2006 federal budget deficit of $4.6 trillion is $1.1 trillion more than the 2005 federal budget deficit," econometrician John Williams, who publishes the website Shadow Government Statistics, told WND. "The Bush administration is in an untenable situation with a budget deficit this dramatic. Taxing 100 percent of all wages, salaries, and corporate profits would not eliminate a deficit of this magnitude, and cutting Social Security and Medicare spending is politically impossible."

In his subscription newsletter, Williams comments that the GAAP accounting numbers reported in the 2006 Treasury report show that, "the actual deficit number was nearly 19-times the size of the gimmicked 'official' deficit for 2006 of $248 billion. Total obligations were 4.2-times annual U.S. gross domestic product (GDP)."


The difference between the $248 billion "official" budget deficit numbers and the $4.6 trillion budget deficit reported in the 2006 Financial Report of the United States Government is that the official budget deficit is calculated on a cash basis, where all tax receipts, including Social Security tax receipts, are used to pay government liabilities as they occur.

The calculations in the 2006 Financial Report of the United States Government are calculated on a GAAP basis ("Generally Accepted Accounting Practices") that includes year-for-year changes in the net present value of unfunded liabilities in social insurance programs such as Social Security and Medicare.

Under cash accounting, the government makes no provision for future Social Security and Medicare benefits in the year in which those benefits accrue.

"Truthfully," Williams points out, "there is no Social Security 'lock-box.' There are no funds held in reserve today for Social Security and Medicare obligations that are earned each year. It's only a matter of time until the public realizes that the government is truly bankrupt and no taxes are being held in reserve to pay in the future the Social Security and Medicare benefits taxpayers are earning today."

Calculations from the 2006 Financial Report of the United States Government also show that the GAAP negative net worth of the federal government has increased to $53.1 trillion, while the total federal obligations under GAAP accounting now total $54.6 trillion.

"The Treasury is right in that Social Security and Medicare must be shown as liabilities on the federal balance sheet in the year they accrue," Williams argues. "To do otherwise is irresponsible, nothing more than an attempt to hide the painful truth from the American public. The public has a right to know just how bad off the federal government budget deficit situation really is, especially since the situation is rapidly spinning out of control."

"The federal government is bankrupt," Williams explained to WND. "In a post-Enron world, if the federal government were a corporation such as General Motors, the president and senior Treasury officers would be in federal penitentiary."

In a letter included in the 2006 Financial Report of the United States Government, David M. Walker, the comptroller general of the United States, commented on the $53 trillion federal government GAAP accounted negative net worth by noting, "This translates to a current burden of about $170,000 per American or approximately $440,000 per American household."

Remarkably, the U.S. Government Accountability Office refused to certify or render an opinion on the consolidated financial statements contained in the 2006 Financial Report of the United States Government, noting serious financial management problems at the Department of Defense, the federal government's inability to adequately account for and reconcile intragovernmental activity and balances between federal agencies, and the federal government's ineffective process for preparing the consolidated financial statements.

In his letter, David Walker commented that until these financial reporting problems were resolved within the federal government, the problems outlined in the audit report "will continue to have adverse implications for the federal government and American taxpayers."

"That's an understatement," Williams told WND.

"What the comptroller of the United States is telling us is that as bad as a $4.6 trillion federal budget deficit and a $53.1 trillion GAAP negative net worth are today, the situation with the Bush administration federal budget deficit might even be worse yet if the government’s overall bad accounting procedures could be fixed. With truly accurate GAAP reporting by the various administrative agencies, the 2006 financial report of the federal government would have shown even larger deficits and a larger negative net worth, hard as that may be to imagine."

It is okay to give benefits to illegal immigrants but to let social security fall by the wayside? Who is watching out for the elderly?

I'm very worried we are going to have a rerrible devaluation of our currency and I'm affraid of the interesses they can shy rocket as well as gold, what do you think?

I think that the US has had some wonderful mortgage rates for quite a long time, as a result, our economy is doing quite well and has allowed many people to get into a house that they might not have been able to afford otherwise. With the money saved, many people are able to make other purchases. The market fluctuates all of the time and people need to keep that in mind. There is no reason to panic when rates rise, especially if they are still in the single digits. My concern is that so many people have a "live for today" mentality. The same people complaining that they have no money are out at bars and restaurants, buying unnecessary things, smoking, drinking, and getting their hair and nails done. Save for a rainy day folks, things will not always be good, or bad, for that matter. If you wait long enough, the economy is going to shift. I am surprised at how many people think that it is common to have bad credit. It should not be common at all. Show me a person with bad credit and I will show you a person with bad habits. I am concernd, however, with our trade deficit to China, the pork in Washington, and the bleeding hearts in our country who feel that it is the United States personal responsibility to take care of the world. We are getting ourselves in so deep that someday soon, we will not be able to take care of ourselves. We need to be a self reliant nation, keep our jobs at home, and use common sense. There are many people responsible for our debts, including ourselves, for voting in the wrong people. In addition, we have had numerous natural disasters that are setting us back financially. The world does not have loyalty to the US, and I think that we need to treat them in kind. Generosity should not be expected. If our country is going to die, let's do it with dignity.

I agree with ever word you say, but the problem is; if our money loose their value, it looses the value against other currencies and if you have savings or ypir pay check every thing you have hre is imported from other country , until now the parameter was the dollar , now they are talking about 30% devaluation, to turn the dollar more atractive in other for all the world not to change let's say to euro they can quote the interress on the dollar 20% a year... that's what I'm talking about, and if you have savings it dosen't mean much because the currency, the paper loose it's value, then the only thing that holds the value normally is gold or silver or diamonds, somethink taht is accepted world wide. The gold has been risisng , and now with the chinese saying they are going to get rid of their 1 trillion dollars exchanging it for gold or silver ? I dont know myself if I'm right , itha's why I'm asking what do you think, if it's right we have to change our dolars into something that hol it's value. Even real state will go down.

Minnie, I wish I did know what was going to happen. You have to follow your gut instinct and do what you feel is right. Personally, I am not going to panic. It is what it is, and there is no crystal ball. If there was, we'd all be rich. I guess a good rule of thumb is to diversify your investments. That way, if something goes bad, you'll have something else to fall back on.

I think now you are understanding what I'm talking about, our economy is on the hands of these people (the Feds) and we have to be vigilants and read between thelines, for them to blow up everything is easy. tha's why I get so worried, People are working andhaveno time to worry but this is very important. If I'm bringing this here is to know others opinion , it's very difficult to makeadecision alone. But don't you think what I'm analysing make sense ? or you think I'm alarmed for nothing ? I really don't know...

The rich people have their information, we are theones who get damaged.

I think the only difference between a rich person and a poor person is that the rich person knows how to reinvest their money. Anyone can get money but the smart ones know how to keep it. Some do get good advice, but plenty of people get lucky by following a hunch. People that scare easy will never get rich because money comes and goes. How far you want to go out on a limb will determine ones success. People who have little, can risk everything because they have nothing to lose (as we see with illegal immigrants). Those who have some comfort level (Middle class America) just try to hold on to what they have, and the rich get the chance to play a little because they have a buffer. I wouldn't be too disgruntled with the rich, they give people jobs, keep the economy going, are generous with their donations, and chances are, they have probably earned it themselves. And if it makes you feel any better, they lose a lot of money too. Look at Donald Trump? For as much as we complain, we all know that it could be much worse., so I think it is important to keep things in perspective. Don't judge a book by it's cover. People that look like they have a lot are often in debt and actually have nothing, while people who look poor (like illegal immigrants) can come up with thousands of dollars on a moments notice while they are getting welfare. Crazy isn't it? Make a plan, diversify your investments, make sound choices, don't panic if things go bad, and have a back up plan just in case. You are smart to keep an eye on the market, just don't panic and don't get greedy.

Neese, I don't think you understand what minnie is talking about when she talks about the rich. We're not discussing the millionaires or even the billionaires like Bill Gates who start businesses and create jobs. We're talking about the modern robber barons who manipulate markets by controlling monetary supplies and thereby controlling governments and legislation and policy for the benefit of their massive multinational monopolies and banking empires.

Do you even understand how "dollars" are created? We don't have real dollars any more. They have been replaced by a monopoly of FRn debt notes. One of these fake dollars cannot be created unless a person, a business or the government takes out an interest bearing loan. Think about that. When one of these things is loaned, it is immediately devaluated but the percentage of interest the loan carries. Every dollar created requires an average repayment of $1.06 in the first year with simple interest and considerably more with compound interest. Since there is no other source for legal tender than these interest-bearing debt notes, the debt they create can literally never be repaid.

We're not talking about productive wealth creating more wealth. We are talking about massive fraud on a grotesque and unprecedented global level. We are talking about liars, cheats and con men using the power of wealth to dominate greedy politicians so that they can defraud each and every one of us until we are eventually all reduced to whatever base level they choose. Now, you may say that none of us ir obligated to take out one of their fraudulent loans, but that's where you're wrong. What they have done is to obligate each of us to massive loans taken out by the federal government whether we want that debt or not. They use the taxation authority of the government to insure that the unconscionable loans are indeed taken out and repaid at the duress of the taxman and his confiscatory authority.