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Thread: Real federal deficit dwarfs official tally

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    Real federal deficit dwarfs official tally

    Real federal deficit dwarfs official tally
    By Dennis Cauchon, USA TODAY

    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.

    Real federal deficit dwarfs official tally

    So basically, this years deficit was $5 trillion... Wonderful.

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    Outer space potato man

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    Re: Real federal deficit dwarfs official tally

    Quote Originally Posted by Grim17 View Post
    So basically, this years deficit was $5 trillion... Wonderful.
    You seem to be suggesting that the government should be made to count as "deficit" money that it hasn't actually spent.
    He touched her over her bra and underpants, she says, and guided her hand to touch him over his underwear
    Quote Originally Posted by Lutherf View Post
    We’ll say what? Something like “nothing happened” ... Yeah, we might say something like that.

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    Sage

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    Re: Real federal deficit dwarfs official tally

    Quote Originally Posted by Deuce View Post
    You seem to be suggesting that the government should be made to count as "deficit" money that it hasn't actually spent.
    He's talking about accrual accounting. Under accrual accounting, expenses are recognized when they are incurred, not when they are paid and revenue is recognized when it is earned, not when cash is received. In the former case, one merely debits the expense and credits the liability. In the latter, one debits a receivable and credits the revenue. For the most part, private sector accounting is accrual accounting. The key is to understand what each method of accounting is attempting to measure.

    FWIW, the GAO puts out annual financial statements of the U.S. that includes the present value net liabilities for the major mandatory spending programs in Note 26. The 2011 financial statements can be found at: http://www.gao.gov/financial/fy2011/11stmt.pdf

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