What's the real federal deficit? | USA TodayThe federal government keeps two sets of books.
The set the government promotes to the public has a healthier bottom line: a $318 billion deficit in 2005.
The set the government doesn't talk about is the audited financial statement produced by the government's accountants following standard accounting rules. It reports a more ominous financial picture: a $760 billion deficit for 2005. If Social Security and Medicare were included — as the board that sets accounting rules is considering — the federal deficit would have been $3.5 trillion.
Congress has written its own accounting rules — which would be illegal for a corporation to use because they ignore important costs such as the growing expense of retirement benefits for civil servants and military personnel.
How is this ok? A small (but growing) number of Congress members are beginning to realize that it's time for the federal government to come clean and stop cooking the books.
If it did so...
~ The $318 billion deficit reported in 2005 would become $760 billion.
~ Each household's portion of the deficit would equal $6,700, more than double the $2,800 given last year.
~ The running deficit since 1997 would equal $2.9 trillion, rather than the official $729 billion reported by the government.
And... before my Democratic friends get started, it's not just limited to those rascally Republicans:
~ The Clinton administration reported a surplus of $559 billion in its final four budget years; the audited numbers showed a deficit of $484 billion.
In addition, none of these figures counts the financial burden of Social Security or Medicare. If they did...
~ The government would have reported nearly $40 trillion in losses since 1997.
~ The new Medicare prescription-drug benefit alone would have added at least $8 trillion to our financial woes (a conservative estimate).
~ The federal government would have had a $12.7 trillion deficit in 2000 because that was the first year that Social Security and Medicare reported broader measures of the programs' unfunded liabilities.
How can Congress operate in such a way? This makes the passage of the FairTax all the more crucial. Our economy will continue to deteriorate (although it is certainly not doing as bad as Democrats would like for us to believe) until U.S. businesses and citizens achieve a level playing field financially, which the FairTax clearly accomplishes.
