[Texgreen] True Deficit: 3.5 trillion, not 248.2 billion as reported

[margaret]

True deficit: $3.5 trillion
Analyst says coming Treasury report will document 'unsustainable' pace
Posted: December 14, 2006  /  1:00 a.m. Eastern

By Jerome R. Corsi
=A9 2006 WorldNetDaily.com

A report scheduled to be released by the Treasury Department tomorrow=20
is expected to show the true deficit in the Bush administration's 2006=20=

federal budget to be an astounding $3.5 trillion in the red, not $248.2=20=

billion as previously reported.
"The Bush administration is running a federal budget deficit at an=20
unsustainable, system-dooming pace of about $3.5 trillion a year,=20
econometrician John Williams, who publishes the website Shadow=20
Government Statistics, told WND.

Williams' argument is fully validated in the Financial Report of the=20
United States, a little-known report Congress has mandated that the=20
Treasury Department publishes each year, reporting the federal budget=20
on a GAAP accounting basis, not on a cash accrual basis.

The 2006 edition of the Financial Report of the United States is due=20
out tomorrow.

"Typically, the Treasury reports the budget deficit on current accounts=20=

basis. That's why Treasury announced recently that the 2006 federal=20
budget deficit was going to be $248.2 billion. But it is a gimmick,"=20
Williams claimed.

"When we see the Treasury report on Friday we are probably going to=20
find out that the real 2006 federal budget deficit is more like $3.5=20
trillion."

Williams predicts, however, the mainstream media won't report it.

"It's not the type of news Reuters, Bloomberg and the Wall Street=20
Journal like to broadcast to investors and the American public," he=20
said. "Besides, the financial press won't take the time and effort to=20
analyze the figures and comb through the footnotes. The report is going=20=

to be released on Friday and most financial reporters aren't=20
accountants."

Why the huge discrepancy between the two figures?

"The $248 billion federal budget deficit figure results from what=20
basically amounts to a cash flow analysis," Williams explained. "On a=20
cash basis, the Treasury takes all the tax revenue, including Social=20
Security taxes, as current income. The trick is that Treasury=20
essentially steals the money that comes in on Social Security taxes,=20
without accounting for any offsetting Social Security liability. When=20
you run your accounting that way, the Treasury gets to report a federal=20=

budget deficit that dramatically reduces the real figure."

What's different about the anticipated 2006 Financial Report of the=20
United States?

"Congress a few years ago mandated that the Treasury had to report one=20=

report each year that used GAAP accounting," Williams told WND. "Then,=20=

when you figure in all liabilities including Social Security and=20
Medicare, the real 2006 deficit is huge by comparison. What I expect to=20=

show up on Friday is a real federal budget deficit of $3.5 trillion or=20=

more, not the $248.2 billion earlier reported."

"Even worse," Williams continued, "the U.S. Government's negative net=20
worth widened to $49.4 trillion in 2005. For the first time, total=20
government liabilities have topped $50 trillion, and the number is=20
continuing to grow. The United States is bankrupt, whether the Bush=20
administration wants to admit it or not."

A quick study of the following table Williams has posted on his website=20=

shows the alarming nature of the Bush administration federal budget=20
shortfalls when GAAP accounting methods are used and all Social=20
Security and Medicare liabilities are fully realized.

continues here:
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