The General Fund Deficit
ILSM has been alerting us to this Treasury Report. As of 9/30/2006, total Federal debt was near $8.5 trillion. Eleven months later, total Federal debt (debt held by the public plus intragovernmental debt holdings) was nearly $9 trillion. Note that intragovernmental debt holdings (e.g., those Social Security reserves) were about $250 billion greater than they were 11 months ago. I wrote here:
Bush’s own economists believe that total Federal debt will exceed $9 trillion by the end of this fiscal year, which translates into a deficit of $556 billion for the year. OK, they projected a much small rise in the debt held by the public as the surpluses of the Trust Funds was projected to be around $300 billion. Their projection for fiscal year ending October 31, 2008 looks even worse. OK, we know they’ve overestimated these things before to declare some sort of great improvement when the actual increase turned out less than their phony forecasts. Nonetheless, the General Fund is still huge and all this garbage about an improving unified deficit is nothing more than the rising Social Security surpluses.
A few ignorant readers (CoRev for example) challenged this statement. But check out what the Treasury is saying and you’ll see I got this right. Seriously folks – isn’t time you learn to read financial statements?
Update: I hate to do this but since CoRev insists my use of “general fund deficit” is somehow a dishonest thing to do, check out this Brad DeLong post. Brad not only uses the term to discuss an important issue – he also defines it. Now if CoRev is still too stupid to follow a SIMPLE discussion, I can’t help him.