Right Change: The Federal Deficit Numbers

A USA Today report dropped a debt bomb today, showing the real federal deficit is four times what the official report shows due to some unique accounting practices in Washington. What does that mean to the typical tax payer? Nearly all of your income would have to go to federal taxes in order for Washington to balance the budget:

"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 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."

It sure is nice to think that the budget issues are actually a lot worse than we even imagined. The other scary part ofthisis– Jim Horney at the Center on Budget and Policy Priorities and a former Senate budget staff expert says retirement programs should not count as part of the deficit. Congress, unlike a business, can change what it owes by cutting benefits or lifting taxes.

Yet another example of how the rules that apply to all of us do not apply to the federal government who apparently has the ability to take whatever they want from whomeverthey want. If you or I did that it would be called STEALING.

Here are some other interesting facts the USA Today article uncovered:

•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.

All of that spending and nothing to show for it but a tepid economy. Are you better off than you were $5 trillion dollars ago?

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