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The Government’s Deficit is 4 Times Greater Than Reported

May 24, 2012

Financial

Writing a check for the deficit

“The typical American household would have paid nearly all of its income in taxes last year to balance the budget if the government used standard accounting rules to compute the deficit, a USA TODAY analysis finds. 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.” This according to a USAToday article by Dennis Cauchon.

What you didn’t see this article? Perhaps that’s because it wasn’t the lead story. No, the winner of American Idol headlined today’s edition of the newspaper. Whether the paper reflects the interest of most Americans, I don’t know.

Nevertheless, Cauchon’s article goes on to describe how reporting rules instituted by Congress allows them to report budgeting details in a way that is prohibited for every other institution in America. For a public company or even a local municipality to report information like congress does would be criminal. Yet, congress can and must by law report in this misleading manner.

Today’s article concerns me for many reasons.

  • We live in a world where those who make the rules can, at the same time, exempt themselves from the rules. Thats literally like the fox guarding the henhouse. Congress writes laws that they believe are in the best interest of the citizenry. Yet when they find that the same laws place undue burdens on themselves or will reflect poorly on their effectiveness, they write exemptions into the law. That’s wrong.
  • The national deficit, not the total debt that our nation has accumulated over the years but the deficit from last year alone, is four times what we thought it was. That’s staggering. If the tax rate was 100%, we could just barely make ends meet as a country. How do we have a government that runs in the red that much? For every household to have to pay 100% of its earnings to keep the country out of debt. That’s crazy.
  • The real federal debt, as calculated by standard accounting practices, equals $561,254 per household. That’s right. To get America out of debt today, you would have to pay over 1/2 million dollars. And so would every house on your street, or every apartment in your building. Every household in America owes over 1/2 million to get our nation out of debt.
  • Sadly, more people are interested in the winner of American Idol than care about our nation’s financial predicament. This is evidenced by the prominence of the placement given to each story in USAToday. Of course, that may not be the case. Perhaps the paper has an agenda and they want to distract us from the truth? Perhaps. But that’s not comforting either.

I understand that there are times when a government must occasionally run a deficit. But the key word is occasionally. That should not be the case year in and year out. And they certainly should report it as everyone else does.

So, is it just me? Or is our country out of control?  What do you think? 

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15 Comments on “The Government’s Deficit is 4 Times Greater Than Reported”

  1. Fred Massa Says:

    So true, the american goverment has gone so far in debt that if China would call us and say we want our money, how would the us pay it. We need to think about ourselves first and stop worrying about all these other countries the us is handing out money to. Depending on the elections and what the votes go, I forget when but if they dont take action on Bush Tax stuff that is to take place there is a possible chance of recession in 2013 if all the ducks line up right.

    Reply

    • Joe Says:

      Good point, Fred. There’s a very real threat that China can hold the debt over the US to get its way. For example, “We’re going to march into Taiwan and take it back. You’re not going to do anything about it or we’ll call in the debt, trashing your economy.”

      The debt can be used as a weapon.

      Reply

      • grahamsnumber Says:

        The problem with that is that the US could just refuse to pay, thereby trashing their economy. The old saying is that if you owe the bank a thousand dollars, you’re their b*&%#. If you owe them a million dollars, they’re your b*&%#.

        Reply

  2. Jarhead Survivor Says:

    This is starting to sound dangerously like sedition…

    Welcome to the club!! But as much as I hate the MSM it all comes back on us as consumers. They give us what we want to hear and apparently Snookie and Kim Kardashian are more important to most than the country being in a financial hole so deep there’s no way we can get out of it.

    It’s also sad to me that most people don’t understand the different between deficit and debt, which I think is related to the MSM spoon feeding us Real World and Survivor.

    I could rant on, which I have on another blog, but I agree with you 100%.

    Whoops! I gotta go. I just heard that Kim Kardashian got a new bathing suit and I’ve got to check it out!

    -Jarhead Survivor

    Reply

    • Joe Says:

      Hahaha, Jarhead. Nice.

      Many Americans seem to really adhere to the “Ignorance is bliss” axiom when it comes to this kind of thing. Or maybe it’s that many believe “We elected really smart people to handle this for us so we don’t have to worry about it. If something was bad, they’d tell us.”

      Reply

  3. whesongerwealth Says:

    We live in a world where those who make the rules can, at the same time, exempt themselves from the rules-

    i love this statement because in Africa it is the norm. our politicians make rules on taxes but they are exempted from taxes, they import luxurious cars tax free, fuel them for free and all sort of things. great analysis.

    Reply

    • Joe Says:

      I’ve got a friend who lives in South Africa and she bemoans the fact that the postal service there is unreliable. She regularly receives empty packages; they have a note that say they were “damaged in transit.”

      For all of the problems we have in the US, by and large it good here.

      Thanks for the comment.

      Reply

  4. Humble1 Says:

    I’m not a gun toter, I’m not a hater of the govt, I do fear possible devaluation of our currency and probable inflation. In that sense a prepper.
    I owe back taxes and I am furiously trying to catch up.

    I am a simple poor carpenter. I am ready for our nation to address the debt and economic debt head on and with the same fervor I’m addressing my taxes.

    We still are the greatest nation on history, I am willing to pay 50% taxes for 5 years to pay down our debt and not leave this mess to my grandchildren, I love them. Austerity on the debt, heck even alternate the high tax rate every other year.

    Green Card? Hey Hispanics are some of the hardest working, moral people I know. However of you are here on a visa working, you pay an extra 5 or 7% in taxes. Hey your enjoying our country and freedoms you should pay a little entrance tax to be applied to our debt. No green card? Hey I like your nice honest, hardworking and have a beautiful family, sorry but jobs are reserved for those who are of this country or those who are here legally, unemployment solved overnight. Yes white folks will do those jobs, wages will rise when employers can no longer take advantage of illegals.

    Any ways, I’m uneducated stupid carpenter and this is my 2 cents

    Reply

    • Joe Says:

      I agree Humble1. If we, as a nation, do not address this issue soon, it will be too late. We won’t be able to get out of the spiral downward caused by the ever increasing debt. The budget will grow and grow as a result of an increased amount that will be required each year to service the debt.

      You mentioned that you’d be willing to pay even more in taxes to knock this out. I’d like to see our country look at the wasted spending as well. I would not feel good about paying more if I believed that money was being spent on things that are not truly necessary.

      Reply

Trackbacks/Pingbacks

  1. “You Should Be On Survivor!” - May 25, 2012

    […] buddy Joe over at Prepping to Survive just wrote a post dealing with the government deficit.  He starts with an excerpt of a story from USA Today and then says: What you didn’t see this […]

  2. Obama, Romney. It Makes No Difference to Me | PreppingToSurvive.com - August 27, 2012

    […] The Government’s Deficit is 4 Times Greater Than Reported […]

  3. The Death of Democracy: You Can’t Believe Everything You Read | PreppingToSurvive.com - October 16, 2012

    […] The Government’s Deficit is 4 Times Greater Than Reported […]

  4. America’s Per Capita Debt is Greater than Greece’s | PreppingToSurvive.com - November 8, 2012

    […] The Government’s Debt is 4 Times Greater Than Reported […]

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