What A Surprise! It Turns Out They Lied About The Deficit Last Year

Tyler Durden's picture

Submitted by Simon Black of Sovereign Man blog,

Truth can be a damn difficult thing to digest sometimes.

Some of us have been there. You get that news from the doctor that you, or a loved one, has just been diagnosed with a serious disease, and it hits you like a ton of bricks.

Several years ago my father was diagnosed with a brain tumor known as a Glioblastoma (GBM). A GBM diagnosis is essentially a death sentence– it’s one of the most aggressive tumors in existence, and it grows in the part of the body that modern medicine understands the least.

I clearly remember the neurosurgeon telling us, “There have been some miraculous advances in medicine over the last 20-years related to the treatment of cancerous tumors. Unfortunately, this tumor is not one of them.”

It was a tough pill for everyone to swallow… especially my father.

Our natural defense mechanism as human beings is to deny reality. These sorts of things happen to other people, not to us.

It’s this same defense mechanism that leads people to ignore the obvious fiscal realities of their home country despite overwhelming objective evidence.

After all, debt-fueled collapse happens to other countries. Not to us.

We go our entire lives being told that our country is different. We’re special.

We have televised ‘experts’ going on TV explaining why our debts and deficits don’t matter. And Nobel Prize-winning pseduoscientists complaining that our debts and deficits aren’t big enough.

But deep down you know the truth.

In the Land of the Free, the Government Accountability Office (GAO) recently released its 2013 Financial Report of the United States government.

This is the government’s best attempt at an honest accounting of its books. And even though they use a different accounting system that gives them special advantages, the picture is still remarkably bleak.

We all know that the US government has racked up a substantial debt; as of this morning, total outstanding public debt is $17,546,814,482,078.90. ($17.5 trillion)

But it’s not all about the debt. Debt is not necessarily evil… and it’s important to look at the situation qualitatively in addition to quantitatively.

Let’s drop a few zeros and consider this in terms of personal finance.

Assume you had $1.75 million in total debt. That sounds like a lot to most people.

But if you had $3 million in liquid assets to offset the debt, plus $500,000 in annual income to pay interest, living expenses, and just about any contingency that could come your way, you’d be in great shape.

It would be even better if that $1.75 million in debt financed a lucrative real estate investment which was generating a 25% cash-on-cash return for you.

But that’s not the case for the US government.

Despite the Obama administration touting a budget deficit of “only” $680 billion in 2013, the GAO’s more accurate accounting shows a total government cost of $3.8 trillion on total revenue of $2.8 trillion.

In other words– the administration wasn’t exactly honest with the American people– the deficit was more like $1 trillion, not $680 billion. But it gets worse.

The GAO added up ALL the US government’s assets in 2013. Aircraft carriers. The highway system. Land. Cash and financial assets. The total is $2.97 trillion.

The liabilities, on the other hand, total $19.88 trillion. This includes the official public debt, plus all sorts of IOUs and loan guarantees.

This means the net EQUITY of the US government is minus $16.9 trillion.

Moreover, the US government’s cash position is a mere $206 billion… roughly 1.1% of its public debt. This isn’t enough to cover net interest payments for the next year.

Unlike a savvy investor who borrows cheap money to purchase productive assets, the US government borrows money to pay interest.

Quantitatively AND qualitatively, the data point to an inevitable conclusion: despite all the propaganda, this is NOT a risk free environment.

And understanding these trends and consequences is absolutely critical to your long-term financial survival.

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MFLTucson's picture

 I would like an example of one thing this group has told us the truth about in the past 5 years.

Greenskeeper_Carl's picture

I ignore any deficit projection they publish anyway. I look at the GAAP deficit, which has been running at 5-6 trillion a year at least, and will continue to grow in the coming years. That's the one that really matters anyway. Try as they might to pretend it doesn't exist, it most certainly does.

RevRex's picture

What hasn't Obama lied about? Is it really NEWS to report that Obama lied? NEWS would be when Obama told the truth, but I guess there would be no reports at all then...would there?

gmrpeabody's picture

Right..., and the Feds are gonna taper... ROFLMAO

DoChenRollingBearing's picture

They lie!  They lie!

"You lie!"  "You lie!"

Ha ha ha ha ha ha ha ha ha!

Ha ha ha ha ha ha ha ha ha!

 

Obama is a liar, LOLOLOL..., WTF is new?!

***

C´mon, ZH Obama voters, fess up!  U wuz punked!

Herd Redirection Committee's picture

As mentioned above, look at the GAAP deficit.  Its WAY more than $1 trillion!  The gov't issues promises like there is no tomorrow (hmmm...) and between Social Security and Medicare and pension promises this machine grinds to a halt long before 2023.  IMHO.

Greenskeeper_Carl's picture

Ya, we have passed the 'event horizon' of debt creation. It took us over 200 years to create the first 8 trillion of debt, and less than a decade to crest the next 8T. It really started to accelerate once we left the gold standard. And it will probably double again in the next decade. Hedge accordingly.

philipat's picture

Damn!! So it's not true that Simon (aka International man of mystery) was on MH370??

BurningFuld's picture

I'll see your ROFLMAO...and raise you two ROFLMAO's.

Squiddly Diddly's picture

Somehow, I fail to see the humor. We know we're just talking about rearranging the deck chairs on the Titanic.

kchrisc's picture

Obama was thought to be the BEST liar to represent the owner of the lies'.

 

"To illegit to quit."

Ham-bone's picture

March 3rd, 2009 - President Obama says "now is a good time for investors to buy stocks"...

NOTaREALmerican's picture

Ya gotta admit, he nailed THAT one.

Wish I had gone all in then.  

I think between Obama's stock calls and Cheney's economic views on deficits the US is in pretty good financial hands.

curbyourrisk's picture

It is easy to nail that, when you control the man that controls the fed that controls the markets.

moneybots's picture

March 3rd, 2009 - President Obama says "now is a good time for investors to buy stocks"...

 

translation: March 3rd, 2009 - Now is the time for an even more massive financial fraud.

Non Passaran's picture

But they always say that.

Did any US prez ever appeal to sheeple to sell or short US stocks?

Ham-bone's picture

Obama (America's 1st financial advisor/president) has maintained his buy and overweight rating...with special emphasis on paper ponzi "assets"

Obama also maintains an underweighting of "evil axis", Russia, and any other "enemy of the state"...plus an extreme sell call on all PM's in conjunction with his employer, JPM, and Chicago partner, COMEX.

YHC-FTSE's picture

...crickets. 

I tried to squeeze out an answer for the last 5 mins and strained so hard I almost sharted.

doctor10's picture

that crap is enough to make a good American think about becoming Russian-or at leats Crimean!!

 

Russia has no debt.NADA. At least relatively speaking

 

http://countryeconomy.com/national-debt

BabylonDeer's picture

Could someone tell my why the colors used to show the GDP% of the country debt has nothing to do with something that visually demonstrate the "seriousnes" of it?. I mean US 103% of GPD - Blue, UAE 16% - Red?. WTF?

ejmoosa's picture

We also seem to forget that GDP is not profit or income.  You cannot pay off the debt with GDP.  You can only pay it off from income or profits.  And that is MUCH MUCH MUCH lower than GDP.

kchrisc's picture

"Russia has no debt.NADA. At least relatively speaking"

You mean Russia is not owned, yet, by Israel?! That's one.

KickIce's picture

President Obama will be at the golf course today.

 

President Obama and his family will be in ___________ (country) on another vacation.

A Nanny Moose's picture

If you like you plan, you can....oh nevermind.

SteveNYC's picture

Duh: $85bn x 12 = $1.02 Trn

Yeah, I'd say its about accurate. Fancy that, the ENTIRE deficit was conjured out of 1s and 0s..........

McMolotov's picture

Time to bust out the trillion dollar coin idea again.

krispkritter's picture

They're going to need a Monster Box of them.

Angus McHugepenis's picture

No need for carrying around heavy metals when you have this: (opens in new window) http://tinypic.com/r/dets3n/8

Pee Wee's picture

Good one, except it is conjured out of your savings, inflation and lower earnings.

Nice try, though.

TheRedScourge's picture

The Fed's balance sheet has nothing to do with the Treasury's balance sheet. If they were combined though, then it would be $2 trillion deficit a year.

PHantomofthemarkets's picture

Who cares??? As long as the markets brings us profits we can keep banning Russian terrorists.

CrashisOptimistic's picture

I don't understand this article.

I went through the links in the article and they quote the $680 Billion deficit.

Tall Tom's picture

On Page 44 of the Financial Statement pdf it shows a 1.0894 Trillion Dollar Deficit.

 

https://www.fms.treas.gov/fr/index.html

 

Click on the Financial Statements link and download the pdf file.

UnicycleBen's picture

Did you actually read that page of the report? Did the author of the article?

That $1.0894 trillion number is for 2012. Look at the top of the column!

The report consistently confirms the administration's $680.3 billion figure.

I have no idea whether that number is correct or not, but the core assertion of this article and your comment-- that the number changed-- is simply, factually, wrong.

Future Jim's picture

Relax ...

 
US Federal Debt – Problem Solved

The American government has been spending trillions of dollars on programs it had no Constitutional authority to create, and such unconstitutional expenditures exceed the amount of the federal debt. Therefore,

The federal debt is unconstitutional.

Not only are most government programs themselves unconstitutional, but the debt used to pay for these unconstitutional programs, which were created by previous taxpayers, is paid for by future taxpayers. Therefore,

The federal debt is Taxation without Representation.

Taxation without representation is also unconstitutional. In fact, it is the reason America seceded from the British empire.

Given that the US Constitution is pretty simple, then anyone who loaned money to the US government should have known that they were loaning money to a fraudulent and illegitimate enterprise and thus should not expect repayment.

Of course, there would be a huge consequence – no one would be willing to loan money to the US government again until it started obeying the Constitution, which would be ...

Good!

cynicalskeptic's picture

The Constitution has been acknowledged ONLY by its violation for some time now.

 

No worry though.  It's easy to pay off TRILLIONS in debt if you don't given a damn about the purchasing power of your money.  

I've got a Zimbabwe banknote that's worth $Zim 100 TRILLION.  That's what happens when you can print away (at least until they won't sell you any more paper - a non-issue for the US where 'money' is created with keystorkes on a computer).

Only problem is that when you reach this point, your savings are worthless and a loaf of bread costs $1 Trillion - or at least a few hundred billion.

 

There's a reason our Founding Fathers gave government the power ONLY to COIN Gold and Silver - specifically REFUSING government the power to print paper money.  But THAT concept was thrown out the window some time ago.......  Remember when LBJ said that removing silver from coins meant NOTHING - that there would be NO DIFFERENCE in the value of your money?  Candy bars that cost 10 cents then now cost $1.50........  project that out into the future on an exponential curve.

 

Squiddly Diddly's picture

Confiscation of 401k's, pensions etc will be considered constitutional.  If you can't hide it they will find it.  They're broke. 

kchrisc's picture

The Restoration of the Constitution begins and ends with Article 3, Section 3.

 

"My guillotine has a 'feet first' option."

highly debtful's picture

At this stage, a lie more or less...

syntaxterror's picture

The bigger surprise would be if they DIDN'T lie about it.

astoriajoe's picture

deleted repeated comment.

Sleepless Knight's picture

What a surprise. Business as usual. Without a debt ceiling, the debt is going to rocket staright up. Every government crook is going to try get the most he can before this all collapses.

Winston Churchill's picture

Better be quick.The only question is whether it implodes on its own, or gets an assist.

Saudi looks very vulnerable about now.A twofer from Putin's position.

People in glass houses shouldn't throw their weight, or anything else, around.

RafterManFMJ's picture

WTF are you on about? We've had DOZENS of debt ceilings ... Problem should be over by now, right?

JustObserving's picture

What no one deny is that US debt and unfunded liabilities per taxpayer are $1,250,000 and rising at $70,000 per year per taxpayer.

Since when has Obama ever told the truth?  He has lied about everything.  He handed US sovereignty on a silver platter to a foreign power in March 2009 when he asked the NSA to hand all its raw data including that on Americans to Israel without any legal restrictions.  Then he almost lied the US to a major war with Syria:

Pulitzer Prize-winning investigative journalist Seymour Hersh has published an article demonstrating that the US government and President Barack Obama knowingly lied when they claimed that the Syrian government had carried out a sarin gas attack on insurgent-held areas last August.

http://www.wsws.org/en/articles/2013/12/10/pers-d10.html

If it weren't for lies, Obama would have nothing to read from his teleprompter. 

cynicalskeptic's picture

Not just Obama.  All US Presidents since Carter - or maybe even earlier - have been figureheads serving TPTB.  The Republic has been dead for some time and the Empire is collapsing at a fast-forward rate.  They will try and hold it together at the end of a gun but when you can't afford the bread and circuses any more things get ugly.

The new dark ages are coming fast - with Serfdom the fate for most.

auntiesocial's picture

for all of the people / naysayers yelling conspriacy / bullhockey.............. there needs to be a separate column / section for appy-polly-loggies...

Atlantis Consigliore's picture

$ 1 MILLION DOLLARS MR POWERS.

NO?  $ 100 MILLION DOLLARS AND A BK HEALTH CARE SYSTEM NO!

$ 1 TRILLION DOLLARS, MR POWERS, Finger and smirk finger to lips.   http://youtu.be/jTmXHvGZiSY

pound the vix's picture

If a Democrat administration Lies in Washington and the press does not report it, did the lie actually happen.