US is in the middle of a fiscal crisis …Rasmussen: Deficit Closer to $4 Trillion for 2012
Pollster and political analyst Scott Rasmussen says the U.S. is in the middle of a worsening fiscal crisis and the federal office charged with estimating the country’s debt has missed the mark by trillions.
Rasmussen, of Rasmussen Reports, released this statemen today following yesterday’s Congressional Budget Office report on the nation’s debt:
The Congressional Budget Office (CBO) yesterday reported that the federal budget deficit is projected to reach $1.1 trillion in 2012. That number is troubling enough but the reality is much worse. The United States will actually go about $4 trillion further in debt during the year.
The difference comes from the fact that government accounting procedures simply ignores the cost of benefits being promised for future Social Security and Medicare recipients. While precise estimates vary as to how much these promises cost, they are in the range of $3 trillion annually. It is important to note that the CBO is not to blame for this accounting gimmick. That agency typically does a sound job of operating within the ground rules established by Congress. Unfortunately, the rules often make little sense.
As former CBO Director Douglas Holtz-Eakin explained to Scott Rasmussen, “The debt from the past is a problem, but the future potential debt is a crisis.”
The government does not recognize the debt piling up for future Social Security and Medicare benefits because they have officially determined that no such liability exists.
As explained in the Federal Budget, “The Federal Government uses the term ‘trust fund’ very differently from the private sector. The beneficiary of a private trust owns the trust’s income and may own the trust’s assets.”
However, “the Federal Government owns and manages the assets and earnings of most federal trust funds.” As if that wasn’t enough, the government “can unilaterally change the law to raise or lower future trust fund collections and payments or change the purpose for which collections are used.”
In other words, the money in government trust funds can be diverted to pay for anything the politicians want to spend it on. The government treats all the money as if it’s in a single pot that can be spent on anything according to the whims of Congress.
Only 10 percent of voters favor this approach but the Supreme Court has supported this interpretation and declared that the government has no legal obligation to pay promised benefits. Scott Rasmussen explains how this works in his new book, The People’s Money: How the American People Will Balance the Budget and Eliminate the Federal Debt.
Rasmussen notes that “The simplest way to get people to make bad decisions is to give them bad information. That’s the way con men work, and that’s how America’s Political Class led America into a fiscal crisis. For several decades, the federal government has consistently and systematically misled the American people about federal spending, deficits, and the federal debt.”
Rasmussen notes that the actual federal debt is closer to $120 trillion rather than the $16 trillion discussed in Congress.
Another gimmick used by politicians is amazingly simple. As 62 percent of voters recognize, when politicians today say they are cutting spending, they are really talking about nothing more than reducing the growth of spending. The impact of this is staggering.
Using the official definitions, the CBO last year presented estimates of what would happen if Congress lived up to its promise to “cut” federal spending by $2.5 trillion over a decade. If that happened, the CBO showed that actual federal spending would go from $3.6 trillion in 2012 to $5.8 trillion in 2021. Only a politician could consider that a spending cut.
In addition to highlighting how the Political Class deceives voters, Scott’s new book shows a clear-headed, heavily researched and data-driven ways to cut trillions from the national deficit with a focus on the three categories that make up the bulk of federal spending (national security, Social Security, and Medicare).
By finding budget solutions with public support, the book includes proposals that are sure to offend every faction of the Political Class… and every Member of Congress This is part of a pattern that has been repeated many times in American history with the public a few decades ahead of the politicians and the politicians struggling to defend the status quo.