Monday, December 27, 2010

Bartlett: Cooking the Books -- The 2010 Deficit Was $2.1 (Not $1.3) Trillion

Bruce Bartlett (The Fiscal Times), Cooking the Books: The 2010 Deficit Was $2.1 Trillion:

If corporate accountants used government rules for their financial statements, they’d be jailed. That’s why we rarely see the real number of the federal deficit—a terrifying $2.1 trillion last year. ...

In principle, changes in the cost of long-term commitments should be included in the budget, as they would under accrual accounting. The Financial Report takes a stab at doing so and finds that it would have almost doubled last year’s budget deficit from $1.3 trillion to $2.1 trillion.

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