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The Real Obama Budget Deficit For 2011: 5 Trillion Dollars

If the U.S. government used the same accounting methods that most U.S. businesses use, the real federal budget deficit for last year would have been 5 trillion dollars instead of 1.3 trillion dollars.  So where does the huge difference come from?  I think a simple illustration would be helpful here.  When you go shopping, do you only count the transactions where you use cash, or do you also count the transactions where you signed on the dotted line and promised to pay later?  Of course you count both of them.  Well, the U.S. government does not count promises to pay later when calculating budget deficits.  The “official” Obama budget deficit for 2011 was 1.3 trillion dollars, but according to USA Today when you add in the rise in liabilities for Social Security, Medicare and other retirement programs that adds another 3.7 trillion dollars to the total.  Those are future financial promises that we have made that future taxes are not expected to cover.  This analysis by USA Today squares very well with what analysts such as John Williams of shadowstats.com have been saying for years.  The truth is that our federal budget deficits have actually been far worse than we have been told.

If the U.S. government was a publicly traded stock, it would be forced to use GAAP – Generally Accepted Accounting Principles.

Sadly, as USA Today explained, the real budget deficit for 2011 would have been almost four times as large as was officially reported if standard accounting practices had been used….

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 amount of red ink the federal government ran up in 2011 alone was almost equal to median household income.

How much worse can things get?

Unfortunately, we have become a nation that is completely and totally addicted to debt.

We have no idea how to live within our means.

Right now, the mainstream media in the United States is freaking out about the “fiscal cliff” that we are approaching in 2013.

In essence, a bunch of tax cuts are scheduled to expire and a few spending cuts are scheduled to kick in.

Everybody is deeply concerned about what such “austerity” could do to the struggling U.S. economy.

In fact, we could even enter another recession if something is not done according to the Congressional Budget Office….

Under those fiscal conditions, which will occur under current law, growth in real (inflation-adjusted) GDP in calendar year 2013 will be just 0.5 percent, CBO expects—with the economy projected to contract at an annual rate of 1.3 percent in the first half of the year and expand at an annual rate of 2.3 percent in the second half. Given the pattern of past recessions as identified by the National Bureau of Economic Research, such a contraction in output in the first half of 2013 would probably be judged to be a recession.

Well, yes, if taxes rise and government spending is cut it will probably trigger another recession.

That is what “austerity” does.  It causes economic growth to slow down.  Just look at Greece.  They have had five years of austerity and now they are in a full-blown economic depression.

But can we really afford to continue stealing trillions of dollars from future generations just to make short-term economic conditions better?

This is what I wrote about the other day.  The U.S. economy has not stabilized because Obama is an economic genius.  It has stabilized because he has stolen trillions of dollars from future Americans in order to make the economy look better in the present.

This was explained further in a recent article by Peter Schiff….

From 2008 to 2009 our national GDP (of around $14 trillion) contracted by $212 billion. To prevent any further dips, the government aggressively spent, borrowing heavily to do so. To the relief of just about everyone, these moves did stop the nominal contraction. From 2010 to 2011 the U.S. GDP expanded by $502 billion, and from 2011 to 2012 it added an additional $508 billion. All told, from the end of 2008 the U.S. economy added a cumulative $798 billion in GDP. But those gains came at a very high price.

The combined federal deficits for the same time frame come in at a staggering $4.2 trillion! In 2009 alone the feds chalked up a chart breaking $1.4 trillion in debt (the deficit was a mere $161 billion in 2007). In other words, we borrowed five times more than we grew. This “strategy” for growth is no different from an individual who loses half his income, but continues to spend by running up credit card debt. Could this be described as economic growth? But that’s just how we are describing our current economy, and for the large part, expert economists, politicians, investors, and academics all agree.

We don’t have real economic growth in America today.

What we have is debt-fueled prosperity.  Without unprecedented borrowing by the federal government we would be in a full-blown economic depression right now.

So where in the world is the U.S. government getting all of this money?  Well, the truth is that most of it appears to be coming from the Federal Reserve.  During 2011, the Federal Reserve bought up approximately 61 percent of all government debt issued by the U.S. Treasury Department.

The Fed is doing all of this buying in a desperate attempt to keep interest rates low.

It is a Ponzi scheme that cannot last too much longer.

But most Americans have no idea how close to the edge we really are.

Most Americans just assume that we will have prosperity forever because that is what always happens in America.

They don’t bother to look at the man behind the curtain.

They don’t bother to notice that Barack Obama is stealing 150 million dollars an hour from our children and our grandchildren so that we can continue to enjoy our inflated standard of living.

Please wake up America.

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  • El Pollo de Oro

    “If you’ve studied Rome, you know that wealthy nations do collapse into Third World squalor when they allow their currency to be debased.”—Alex Jones

    Neocon Dick Cheney, one of the criminal masterminds of the Bush cabal, once claimed that deficits don’t matter. But deficits do matter. They matter a lot. And whatever happens in November—whether we end up with four more years of Barack “Goldman Sachs” Obama or a new regime under Mitt “Wall Street” Romney—The Banana Republic of Republic (formerly Gli Stati Uniti) will continue to be buried in massive debt. Neither the Democrap nor RepubliKKKan wings of the War Party will reduce the crushing debt because big spending is in their DNA. Any austerity measures implemented in The Banana Republic of Republic will be aimed at what is left of our dying middle class; the military/industrial complex, corporate welfare, the War on Drugs, the Prison/Industrial Complex and imperialist wars will be exempt from austerity. Schools will close, the infrastructure will continue to rot and decay, and food stamps will evaporate, but taxpayers will still be asked to pay exportation money to the criminals of Wall Street. And the more desperate that formerly middle class Americans become, the more violent things will become. Expect civil unrest on a grand scale; expect violent crime to skyrocket. Get ready for the riots and unrest of Greece combined with the ghastly crime of Honduras.

    “This is beyond left and right. This is about good and evil, right and wrong. And if people can’t recognize that we’re in deep trouble, they are abetting pure evil.”—Alex Jones

    “We’re in the midst of a financial crash, and they want the Gestapo in place to keep the people in place because when the money stops flowing down to the man on the street, the blood begins flowing in the streets.”—Gerald Celente

    “There is going to be financial anarchy in Europe, and it is going to cause a slowdown worldwide.”—Jim Cramer

    “If there is war against Iran, it is going to be the beginning of World War III—and we will go into a depression, the likes of which people have never seen. This will reverberate worldwide.”—Gerald Celente

    These are incredibly dark times we’re living in. Benvenuti al fine dell’Imperio Romano. Benvenuti alla Repubblica Banana d’América, dove non c’è speranza—soltanto povertà , sofferenza e violenza. Che dio ci aiuti. In other words, we’re really screwed.

    • A Concerned AmeriCan Patriot

      Regarding your comment on the possible war against Iran and WWIII, and how that could lead to depression: The way wars are fought now, it would, when politics takes the front seat and winning the war takes the back seat, wars drag on; If we had fought the Afghanistani and Iraqi wars like we did WWII, with politics taking the back seat, we would have saved billions of dollars, countless years shaved off of the war, and most importantly; we would have saved thousand good American lives. If we do get into war with Iran, it won’t be military might that crushes us, it will be the unwillingness of politicians to allow us to fight and win the war quickly. If China and Russia support Iran, let’s just say things won’t be pretty.
      As General William Tecumseh Sherman once said “War is cruel, the crueler it is, the quicker its over.”
      Our politicians need to follow this mindset instead of the drawn out war philosophy, which paints their pockets green with cash, at the expense of Americans who are infinitely better people than any politician.

  • mondobeyondo

    “Live within your means”? How on earth do we do that?

    Okay, short list here:

    Cut the cable. Cancel the cable. It may need you, but you don’t need it.
    Switch from filet mignon to London broil steak. Who cares, it’s all beef.
    Stop buying Snapple, and buy a box of Lipton tea bags. Make your own tea.
    Run to Home Depot and buy some vegetable seeds. Plant, water, wait a few weeks.
    Make your home/apartment/tent more energy efficient.

    That’s for starters. And now I’m off to Red Lobster for dinner tonight.
    (yeah, right)

    • JStevens

      Good, basic advice, but do NOT buy seeds from Home Depot. GMO seeds have no place in the next life. Buy purely, unaltered seeds from reliable sources.

  • mark

    The way to regain a good economy is to shrink the size of Government with cuts and at the same time cut taxes. This was done in 1921 and it brought us out of a depression very quickly. We must also cut rules and regulations to allow business to compete aroud the world. We will have some pain for a while if we do this , but it is better than falling of the cliff. But relax everyone, there is no way that our leaders in Washington would dare to do something right.

  • http://urbansurvivalguidesecrets.com Urban Survival Guide

    I got stuck on the title “The Real Obama”, because we have no idea who this guy is…

    His name was Barry Saetoro when he was in school in Indonesia.

    The birth certificate that was released from his staff last year had many image layers, which means that information was overlayed on top to make changes. A normal copy of a certificate would be flat, meaning one layer.

    His records from school have been sealed/eliminated.

    He probably couldn’t get a regular government job, because he wouldn’t pass the background check. :-P

  • ss69100

    Egreggio El Pollo de Oro!
    I agree with nearly everything, but one item:
    the WW3 will give a rise to US economy. Look the data of how the Ricains has profited during WW2 and even WW1.
    That’s why Obama or other pupazzo will do everything to start a war with Iran once the elections passed. If not by the GI’lives then with the rise of Islamic extremists. Whom they will guide to attack Israel and Iran would be obliged to follow.
    Because the ultime aim is India and China. Who demande their quantity of ressources. And this attack of Asia would be done thanks to this Islamic wave. That’s why Israel will be sacrified.

  • Proftel

    Last Wednesday I took a plane from Goiânia-GO to Sao Paulo-SP (Brazil).
    Unfortunately I forgot the notebook inside the backpack itself a Phillips screwdriver to dismantle this type of equipment (I’m Technical) and, moreover, due to the cold I opted for a boot that covers the heel (which in the sole has a metal rod to stiffen the soles).
    Because of this I almost left his underwear in front of everyone (as). I had to get the vest, jacket, wool sweater etc. .
    On top of that, I fell in between teeth bullshit comment “will travel any day naked.”
    The Security heard and understood, asked if he was “implying” something that will at once let out in the face “- I am not suggesting, I am prophesying …” kkkkkkkkkkkkk.
    If it were not for 14 hours by bus in view of the 2 hour flight, I will opt for the bus; have violated intimacy is indescribable.
    Unfortunately this trip was an emergency, my Father is with pancreatic cancer in terminal phase.
    :-/

    • mondobeyondo

      I am sorry about your father. I will pray for him.