The U. S. Government has gone to great lengths in using accounting gimmicks to prop up the financial system and domestic economy. One area where this is readily apparent is the disconnect between the rising U. S. debt versus the annual budget deficits.
Mish Shedlock wrote about this in his article, U. S. Deficit at $590 Billion But Debt Up $1.2 Trillion: Sleight Of Hand Magic:
The US deficit is up $590 billion so one might think total US debt would rise by that amount or at least something close to that amount.
Instead, total US debt for the fiscal year that just closed soared by over $1.2 trillion. What’s going on?
The shortest answer is ‘deficit lies’. The longer answer involves numerous off budget items like social security do not count towards the deficit but do count towards debt.
This post was published at SRSrocco Report on December 31, 2016.