You think that annual deficits of between $1.3 and $1.5 trillion are horrendous? Try an annual deficit of $5 trillion.
That’s what a major story in USA Today suggests. The only reason the deficit is as “low” as $1.3 trillion is because of the bizarro accounting tricks used by Washington.
Here’s part of the USA Today story:
“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 deficit was $5 trillion last year under those rules. The official number was $1.3 trillion. Liabilities for Social Security, Medicare and other retirement programs rose by $3.7 trillion in 2011, according to government actuaries, but the amount was not registered on the government’s books.
“Key findings:
“.Social Security had the biggest financial slide. The government would need $22.2 trillion today, set aside and earning interest, to cover benefits promised to current workers and retirees beyond what taxes will cover. That’s $9.5 trillion more than was needed in 2004.
“.Deficits from 2004 to 2011 would be six times the official total of $5.6 trillion reported.
“.Federal debt and retiree commitments equal $561,254 per household. By contrast, an average household owes a combined $116,057 for mortgages, car loans and other debts.
“”By law, the federal government can’t tell the truth,” says accountant Sheila Weinberg of the Chicago-based Institute for Truth in Accounting.”
In other words, the debt crisis in this country is worse—much worse—than any of us have been led to believe. And the Obama-Reid-Pelosi spending blowout has tipped us into the red zone so far that many of us wonder if we can ever recover.
One thing is certain: if we don’t cut spending, rein in government, and reform the biggest budget monsters of the entitlement programs, America will cease to exist in any recognizably free form.