WHY Bombs Now ? Actual 2004 US Budget Deficit at $ 11.1 Trillion

[cthrumatrix]

FEDERAL DEFICIT REALITY: AN UPDATE


July 7, 2005

_____


U.S. Treasury Shows Actual 2004 Budget Deficit at $11.1 Trillion

Ultimate Crisis for Dollar Moves Beyond Possible Remedies

Hyperinflation and New Gold-Based Currency
System Are Likely Consequences


When the U.S. Treasury reported the official 2004 federal budget deficit at a record $413 billion last October, the hisses and boos in the financial media were unrelenting. Two months later, the Treasury reported the actual 2004 deficit -- using generally accepted accounting principles (GAAP) -- was really an incredulous $11.1 trillion <1>, up from $3.7 trillion in 2003, yet nary a word was heard in the financial media, from Wall Street or from any political denizen of that former malarial swamp on the Potomac. An exception, of course, was Treasury Secretary John Snow, who signed the government's financial statements, but the data release was as low key as physically possible.

The silence partially reflects the financial-market terror that would accompany an effective national bankruptcy. Such is the risk when a government's fiscal ills spin so wildly out of control that they no longer are containable within the existing system.

Consider the traditional solution of raising taxes. Putting the $11.1 trillion deficit in perspective, if the government raised individual and corporate income taxes to 100%, seizing all salaries, wages and profits, the government's 2004 operations still would have been in deficit by trillions of dollars. The deficit has moved beyond practical fiscal control! Many in government and the markets are aware of the underlying deficit reality, but few dare to sound the alarm, for the ultimate resolutions to the situation all are political or financial nightmares.

http://www.gillespieresearch.com/cgi-bin/s/article/id=596

I'm sure CNBC and others can't wait to report this ..........


PS...here is the Govt document

"2004 Financial Report of the United States Government." The full document is available as a PDF file at www.fms.treas.gov/fr/04frusg/04frusg.pdf. The table published in the Overall Perspective on page 11 shows the $11.1 trillion annual eterioration in the government's net worth.

[jmaier]

1. A scary article but

I don't understand your title at all...

[cthrumatrix]

2. this report is dated TODAY 7-7 ..... just another distraction from facts

it is certainly not the only reason for london...just another for

the thugs in the WH

[cthrumatrix]

3. for rethugs...deficits "don't matter"....ask FU Cheney

same abover link:

Such has been the traditional cure for countries that borrowed so far beyond their means that they ended up with a choice between bankruptcy and hyperinflation. Hyperinflation seems to be the easier political route, although, for the first time, it will involve the world's primary reserve currency.

In a hyperinflation, the currency very rapidly becomes worthless. In the classic case of the Weimar Republic of the 1920s, a 100,000-Mark note became more valuable as toilet paper than as currency; wheel barrows full of currency were needed to buy a loaf of bread; an expensive bottle of wine one night was worth even more the next morning, empty, as scrap glass. That is the eventual environment the United States faces because of its out-of-control fiscal madness.

For decades, "The deficit doesn't matter" and "The dollar doesn't matter" have been guiding principles in Washington. The deficit and the dollar do matter, greatly, as Washington, the U.S. public and the global markets will learn shortly.

[enid602]

4. debt vs deficit

I think $11.1 trill is the 'debt,' not the deficit. The deficit is how much more you spend than take in during a certain period of time. The debt is the cumulative total of all the deficits and surpluses (less any payments, if they are made) over the years.

[Egalitariat]

5. Both numbers are wrong. The article is BS.

Or the guy has no understanding of economics. Probably can't even spell it.

Our country's financial picture ain't rosy by any means, but this guy hasn't a clue.

[cthrumatrix]

6. it's using GAAP .... which corp use.... govt do not use for obvious reason

[papau]

8. NOPE - it's a bullshit number - the present value of future liabilities

in excess of current assets plus future income flows.

It is all the health ins crisis that Bush is refusing to deal with (about $3 T is the Social Security problem - if there is a problem worth $3T instead just bad assumptions screwing up the present value calculation.

Just return tax on rich to 2000 level and it all goes away.

Indeed the increase is the tax cuts in 2003, 2004, and newly planned and passed into law for the out years, plus new projections on health care (Medicare/Medicaid) out year costs.

[Jacobin]

7. Rong.

The 'deficit' is the annual amount by which government receipts are exceeded by government expenditures.

The 'national debt' is the cumulative amount of the annual deficits, which is north of $9 trillion.

Nice try, though.

[papau]

9. National Debt is $7.8 Trillion of which much is held by China, Japan, and

the Social Security Trust Fund.

The Debt To the Penny
Current Amount

07/06/2005 $7,842,026,166,045.39


Current
Month

07/05/2005 $7,837,390,167,131.19
07/01/2005 $7,827,306,264,287.53



Prior
Months

06/30/2005 $7,836,495,788,085.86
05/31/2005 $7,777,880,152,594.89
04/29/2005 $7,764,537,337,364.14
03/31/2005 $7,776,939,047,670.14
02/28/2005 $7,713,137,673,664.71
01/31/2005 $7,627,742,597,775.41
12/31/2004 $7,596,165,867,424.14
11/30/2004 $7,525,209,508,979.45
10/29/2004 $7,429,677,448,545.04
http://www.publicdebt.treas.gov/opd/opdpenny.htm