According to the U.S. Congress, the federal government’s budget deficit last year was $1.3 trillion. According to a
USA Today analysis, the true figure is an astronomical $5 trillion.
The reason: Congress exempts itself from including the cost of promised retirement benefits when computing the deficit, unlike companies which must include these commitments in financial statements.
Liabilities for Social Security, Medicare and other retirement programs rose by $3.7 trillion in 2011, but the amount was not included on the government’s books, the analysis found.
If the retirement commitments were included, the deficit would be equal to $42,054 per household. Since the median income of U.S. households is $49,445 according to the Census, the typical household would have paid nearly all of its income in taxes to balance the budget last year if standard accounting rules were used to compute the deficit.
“By law, the federal government can’t tell the truth,” accountant Sheila Weinberg of the Institute for Truth in Accounting told USA Today.
If future commitments are taken into consideration, the deficits from 2004 to 2011 would be six times the official total of $5.6 trillion.
The analysis also determined that federal debt and retiree commitments equal $561,254 per household, while the average household owes $116,057 for mortgages, car loans and other debts.
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