http://www.treasurydirect.gov/govt/reports/pd/debttothepenny.htm Check it yourself. This fiscal year, "official deficit" reported around 600 Billion. Last fiscal year, "official deficit" reported around 550 Billion. Go back one year from today on that spreadsheet. US National Debt up 1.5 Trillion in last 12 months, since today. Somehow, they are accruing debt to the nation without accounting for it in the official budget. Or at least, the budget deficit figure. Cause those two numbers don't add up.
Differences in those two numbers are accounted for predominantly by cash on hand but not spent by the Treasury, i.e. bond sales proceeds that aren't yet used, and government loan programs. For example, deficit is the difference between your revenues and your expenditures, debt is how much money you owe, so you can see that if Treasury did a bond sale the amount we owed would go up by the amount of the sale, while it would have no impact on deficit because a bond sale isn't spending until it's actually spent. It's all basic accounting, not some conspiracy that's been going on for years that only achilles28 was clever enough to uncover through his masterful comparison to the change in the debt with the deficit.
Thanks for the explanation. So you're saying we raised 1.4 Trillion in the last 12 months, but only spent roughly half on the deficit ? Is that right?
Govt loan programs are also a huge part of the discrepancy, I just used unused debt proceeds as an example because its easier to intuitively explain. There are a whole lot of loan programs for everything from farmers to low income housing. Those loans outstanding are considered debt because we had to raise money money to fund them, but only the expected default rate on the entire portfolio is considered spending because most of the loan proceeds will be paid back.
I'm sure these numbers are way outside the averages. Who "lends" 1 trillion in government loans in one year ? This isn't a regular occurrence
It's all in the tables... Compare here and here and you shall see that the US Treasury borrowed arnd $800bn in the mkt. The additional $600bn came from increases in the Government Account Series (GAS) holdings (for the US, probably the Medicare Trust Fund and the Social Security Trust Fund).
So how trustworthy are these classifications? Remember FED QE operations didn't constitute 'monetization' because the securities would be quickly sold? Last time I checked, FED balance sheet still at 4.5 Trillion. So that's a load of bullshit. Perhaps this is too eh.
Well, all I can say is that the mkt doesn't seem to think Fed's QE was monetization. It thought that maybe for a millisecond in 2011, but we've moved on since then. As to how trustworthy this data is, my attitude to this is one of pragmatic cynicism. I generally believe that grand government conspiracies are unlikely, because they're difficult to implement, especially covertly, and governments are just not that good. So, unless there's specific evidence to the contrary, I don't see anything too bizarre in there. Obviously, other than the effectively unfunded SocSec and Medicare deficits, but this is neither here nor there.
Having worked in government I'll heartily second the notion that covert grand government conspiracies are just too hard to pull off. If you've actually ever done anything inside government you'd realize how laughable the concept is. I do find it funny how the same people who constantly claim that the government is staffed by idiots who are completely inept also somehow believe that same government is capable of pulling off stunning conspiracies which require a huge number of these supposedly inept people to work with spy movie like precision and no errors to accomplish.