Real U.S. Deficit in 2011: $5 Trillion

May 24th, 2012

Via: 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.

Posted in Economy | Top Of Page

One Response to “Real U.S. Deficit in 2011: $5 Trillion”

  1. Windhorse says:

    Oh my I love this atatement in the article:
    Jim Horney, a former Senate budget staff expert now at the liberal Center on Budget and Policy Priorities, says retirement programs should not count as part of the deficit because, unlike a business, Congress can change what it owes by cutting benefits or lifting taxes.

    “It’s not easy, but it can be done. Retirement programs are not legal obligations,” he says.

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