Financial Wizardry

From the Daily Reckoning, my favorite purveyor of financial facts.

“…From the Financial Times comes a report on the sorry state of U.S. federal finances. The "President's Budget" shows a deficit of $319 billion for this fiscal year.

The U.S. Treasury Department also produces its own budget, called the "Financial Report of the US." It shows a budget deficit of twice as much: $760 billion. The difference between the two is that the U.S. Treasury Department prepares the budget more or less as every company must - on an accrual basis. It takes into account not only cash outlays, but contracts and commitments. The President's Budget is merely a statement of cash in, cash out. Were GM and Ford to account for their businesses that way, they'd be gushing profits, too!

The Financial Times goes on to note that it took 204 years for the U.S.
government to accumulate its first $1 trillion in debt. Now, it adds that much every 18 months. George W. Bush has added more debt than any president who ever lived. In fact, he's added more debt than all the presidents who ever lived...combined.”