Real federal deficit dwarfs official tally

[dkf]

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.

The deficit was $5 trillion last year under those rules. The official number was $1.3 trillion. Liabilities for Social Security, Medicare and other retirement programs rose by $3.7 trillion in 2011, according to government actuaries, but the amount was not registered on the government's books

http://www.usatoday.com/news/washington/story/2012-05-18/federal-deficit-accounting/55179748/1

[banned from Kos]

1. yeah - its the old accrued liablilities method of accounting

but we aren't counting future tax receipts either.

[JDPriestly]

2. The solution: End the Bush tax cuts

and impose once again the federal estate tax on very large estates as they pass from one generation to another.

When we did away with federal estate taxes, we chose a policy that gives preferential treatment to the extremely wealthy and makes it more difficult for the rest of us to improve our economic and social status. The estate tax was a leveling mechanism that, without being overly repressive for very rich people, spread the wealth just a bit.

And the state tax does not take anything away from the person who earned the money in the estate.

As for the claimed danger that an estate tax poses to family farms, I say nonsense. The danger to family farms is posed by corporate farms. And many of the erstwhile family farms have become corporate farms.

We really need the estate tax. It imposed taxes only on huge estates, not on anyone else. We need it to pay off the federal debt.

As this article points out, we cannot reduce the deficit to any meaningful extent without collecting considerably higher taxes somewhere. The poor and middle class just don't have the money. So the rich will either have to pay or leave the country. And I say that if they don't want to support the democratically elected governments of the US, they should leave.