Free Markets, Free People

truth


Lies, deficits and even more irony

I’m sure you have seen the chart that’s been circulating by Rex Nutting of Marketwatch in which he claims that Obama has overseen the least growth in federal spending.  In fact what Nutting reproves is the old “lies, damn lies and statistics” cliché.  James Pethokoukis  takes his argument apart here.

Then there is this story today.  It too pokes huge holes in the attempt downplay spending for the past few years during the Obama administration.  In this case the story points out the accounting practices, or lack thereof, that Congress uses that would likely find any business using them accused of keeping double books:

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.

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.

If you think unemployment is under reported, when it comes to the deficit, you ain’t seen nothin’ yet, brother.

$5 trillion dollars.  Let that sink in a bit.   If this were any business out there using standard accounting rules, that’s what they would, by law, have to report.

Congress?   Well, they’re special.  They get to make up the rules as they go along and then follow them only if they wish too (with the option then of again changing the rules to fit what they’ve decided to do).  In fact, since today seems to be irony day, the irony is:

"By law, the federal government can’t tell the truth," says accountant Sheila Weinberg of the Chicago-based Institute for Truth in Accounting.

Amazing but not shocking.  In fact, not even surprising.  We didn’t get here by being told the truth.

Oh, and remember real unemployment is at 8.1%. (*cough, cough*)

Forward!

~McQ

Twitter: @McQandO