Regular readers will remember a recent commentary (“Treasury Department Stalls Budget Report”), where I pointed out that the Treasury Department had refused to release its annual (mandated-by-law) calculation of the U.S. budget (and budget-deficit), using GAAP accounting.
This accounting was of tremendous significance, since it was the only statement of U.S. government finances without the nearly infinite number of statistical lies which have been incorporated into virtually all U.S. government reporting - because it had (previously) been bound by the principles of “GAAP” accounting (“Generally Accepted Accounting Principles”). These are the same rules which all corporations are required to use in their own accounting.
The Treasury Department has finally released its report: for the fiscal year 2009...and we now know why it is three months late – courtesy of John Williams of Shadowstats.com. According to Mr. Williams, the Treasury Department has invented an entirely new “methodology” for “calculating” the U.S. budget.
The obvious question to ask is why, in the midst of the worst budget-crisis in U.S. history did the Treasury Department find it necessary to invent this new methodology? Have the rules of GAAP accounting been altered? The answer to the last question is “no”, meaning there could be no “good answer” to the first question.
Obviously, if the U.S. government is bound by the same set of accounting rules/practices as it was the previous year, then there can be no possible statistical justification for completely altering the way it performs this calculation. In other words, yet another government “statistic” has been totally falsified.
In his typical, under-stated manner, Williams simply says of this latest “calculation” that “the numbers underreport the severity of the U.S. government's fiscal circumstances.” No kidding!
The GAAP-calculated deficit for 2008 (i.e. the only valid reporting of that year) totaled $5.1 trillion. Given that since that time, government revenues have plummeted at the fastest rate in history – while spending is still rapidly rising – it was obvious that the GAAP-calculation for fiscal 2009 would be much worse than 2008. John Williams previously posted his own estimate of the real deficit: approximately $9 trillion.
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