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Obama continues peddling fantasy deficit numbers

The White House released new estimates of the additional deficits which the U.S. government will rack-up over the next decade – now projected to exceed $9 trillion . In just one year that estimate has worsened by $2 trillion. This is another illustration of how White House 'accounting' has absolutely no connection to the real world.


To demonstrate this, I don't need to look at the ever-changing (and ever-worsening) estimates of future deficits, I only need to look at their past accounting – where the numbers are not “estimates” but (supposedly) the actual “balance sheet” for the U.S. government.


During the eight years of George Junior's reign of incompetence, the White House dutifully recorded eight “official” deficits, which totaled over $2 trillion. The problem is that the U.S. government's total debt rose by about $4.5 trillion – double the “official” numbers. Ultimately, this multi-trillion dollar “bookkeeping error” can be easily identified.

During Bush's two terms, the White House reported a positive balance of over $1.4 trillion in its “off-balance sheet” accounting. The problem is that not one penny of that “surplus” really existed. This raises several obvious questions. Let's start with this one: how can any (honest) government justify any “off-balance sheet” accounting?


This is not some private corporation trying to pump-up its share price through the fraudulent accounting which has become a way of life in Corporate America. This is the government “of the people, by the people, and for the people”, where these servants of the American public have an obvious duty to report anything and everything they are doing with the peoples' money.


Even if we accept the premise that some of the activities of the U.S. government are of such a sensitive nature that the U.S. government can't/won't disclose these activities (like torturing suspected “terrorists”), what money-making activities could possibly be so “top-secret” that the American people are not entitled to know about them? Was the CIA expecting $1 trillion in “windfall profits” through its intimate dealings with South American drug-cartels?

There is an additional discrepancy of over $1 trillion in the numbers - for which there is no explanation of any kind.

For eight years, the huge discrepancy between the “official” deficit numbers of the Bush regime and the actual increase in debt made it crystal-clear that none of these “off-balance sheet profits” existed. If we accept the fact that the Republicans would not want to point out their own accounting lies, we must ask why didn't the Democrats inform the American people of this $2 trillion “bookkeeping error”?


There are only two possible conclusions. Either not one member of the Democrat Party ever actually looked at the government's accounting for eight, whole years, or, they deliberately chose to help the Republicans hide their lies. Again, this leads to only two logical conclusions: either there is (in reality) only one political party in the U.S. (which has been split into two parts to create the illusion of a “democracy”), or the Democrats planned on telling equally outrageous lies when it was their turn to rob Americans “blind”.


This also implies (at the least) an unspoken agreement between the two parties to permit each to engage in fraudulent accounting as the governing party, while the party in opposition promises not to reveal the truth. What lends credence to this is that while the two parties generally seek to twist even the tiniest details into attacks on the other, they never criticize each other's accounting.


While both parties freely and frequently criticize each other's spending plans (on an individual, item-by-item basis – and with rabid tenacity) not one member – of either party – has the integrity to point out the monstrous lies contained in each year's “official” budget, not even the semi-independent Ron Paul.


Even though I am only reporting on the eight years of multi-trillion dollar lies by the Bush regime, I am not suggesting that this massive fraud in U.S. government accounting began with George Junior. Given the extreme hatred which many Democrats have toward Junior, it is inconceivable that they would have let him begin this campaign of fraud – someone would have “spilled the beans”.


It is equally obvious that this fraudulent accounting didn't begin during the Clinton years, for precisely the same reason (in reverse). Thus, at the least, the era of totally fictional U.S. budgets could have started no later than with the government of George Senior. It is certainly possible that given how badly American politicians of both parties wanted to turn the U.S. war-machine loose on former-ally, Saddam Hussein, that U.S. politicians would have entered into a “marriage of convenience” - where the 1st Bush regime was given permission (by both parties) to create a new, fraudulent set of U.S. accounting records – to hide how much taxpayer money was squandered beating up on a country which had been largely equipped with U.S. weaponry.


When Clinton succeeded Bush, “Slick Willy” clearly saw an opportunity to portray himself as an “economic hero” - by maintaining the Bush-lies in order to pretend the U.S. was actually producing “budget surpluses”. Even if we only look at the trillions of dollars which Clinton stole from the Social Security “trust fund”, his so-called “surpluses” are an obvious lie.


Indeed, rather than each party exposing the financial misdeeds of the other, it appears that each time one of the parties invents a new way of falsifying government accounting the other party simply copies those fraudulent practices when its their turn to sit in the “driver's seat” of this two-party dictatorship.


It is in this context that the latest “deficit estimates” of the Obama regime must be judged. To begin with, Obama has confessed that the future deficits over the next ten years would be $2 trillion higher than what “we” estimated a year ago. Given that one year ago this deficit estimate was calculated by a Republican government, obviously “we” refers to Republicans and Democrats.


What kind of politician passes up a golden opportunity to smear the record of the previous government – especially a discrepancy of this magnitude? While the Democrats have made a few, timid assertions about “inheriting” problems bigger than they had previously thought, they refuse to point out the blatantly obvious, multi-trillion lies.


Given this irrefutable collusion between the U.S.'s only two political parties, is their anyone who still has the audacity to challenge my characterization of the U.S. government as a “two-party dictatorship”?


During the eight years of the Bush regime, the “official” deficits were very close to being exactly half of the actual deficits. Thus, as I wrote shortly after Obama was sworn-in (see “Interpreting Obama deficit numbers using the 50%-rule”), we should assume that the agreed upon level of lying which is allowed between the two parties is to only report half the true deficits.


Currently, Obama is projecting a $1.4 trillion dollar deficit, which means (in the real world) a deficit which for this year alone will approach $3 trillion. For future years, the deficit “estimates” will be ratcheted higher each year, as they were during the Bush years. Therefore, the current projection of

$9 trillion of additional debt more likely means $15 - $20 trillion of new debt – at least. These estimates are derived from extremely optimistic projections for future growth in the U.S. economy, when the reality is that servicing these massive, mountains of debt makes real economic growth all but impossible.


An $11 trillion “national debt”. $56 trillion in total public/private debt. $70 - $100 trillion in additional “unfunded liabilities” - and that is just at the federal level. Most U.S. state and local governments began copying the fraudulent accounting of the federal government years ago, meaning they are also facing trillions of dollars in “unfunded liabilities”.


Dragged down by this economic millstone, it is a matter of simple arithmetic that the U.S. economy (a mature capitalist economy) must grow at an ever-slower rate (even during the good years) because so much of the remaining economic activity is consumed making interest payments. This means that the future projections of U.S. deficits will likely have an even greater margin of error than the standard 50% lie.


If we think of the U.S. economy as the “Titanic”, then what Americans are getting from their “leaders” in Washington is the ludicrous assertion that they are successfully “bailing water” out of the Titanic – with a bucket.


Equally obvious, the corporate propaganda-machine which masquerades as a “free press” is a willing accomplice in the government's campaign of lies. No one worthy of the name “journalist” could fail to see the gaping, $2+ trillion “hole” in the Bush budgets.


The Titanic isn't simply “going down”, it's almost sunk. Yet, on a near-daily basis, the “Skipper” (aka Ben Bernanke) assures the American people that “it's smooth sailing ahead”. Millions upon millions of “underwater” mortgages don't lie. Trillions of dollars in “underwater loans” continue to sit on the books of U.S. banks at fantasy valuations.


Presumably, when the Titanic is sitting at the bottom of the ocean, newly reappointed Ben Bernanke will resurrect his infamous description of the U.S. as a “Goldilocks economy” - one that can never go lower.