US Treasury: Government Liabilities Rose $2 Trillion in Fiscal Year 2010

WASHINGTON (Reuters) – The U.S. government fell deeper into the red in fiscal 2010 with net liabilities swelling more than $2 trillion as commitments on government debt and federal benefits rose, a U.S. Treasury report showed on Tuesday.

The Financial Report of the United States, which applies corporate-style accrual accounting methods to Washington, showed the government’s liabilities exceeded assets by $13.473 trillion. That compared with a $11.456 trillion gap a year earlier.

Unlike the normal measurement of government intake of receipts against cash outlays, accrual accounting measures costs such as interest on the debt and federal benefits payable when they are incurred, not when funds are actually disbursed.

The report was instituted under former Treasury Secretary Paul O’Neill, the first Treasury secretary in the George W. Bush administration, to illustrate the mounting liabilities of government entitlement programs like Medicare, Medicaid and Social Security.

The government’s net operating cost, or deficit, in the report grew to $2.080 trillion for the year ended September 30 from $1.253 trillion the prior year as spending and liabilities increased for social programs. Actual and anticipated revenues were roughly unchanged.

The cash budget deficit narrowed in fiscal 2010 to $1.294 trillion from $1.417 trillion in 2009. But the $858 billion tax cut extension package enacted last week is expected to keep the deficit well above the $1 trillion mark for another year.

BUDGET CUT DEBATE

The latest Treasury report should fuel debate in Congress over spending cuts next year as a new Republican majority in the House of Representatives takes office.

The U.S. Senate on Tuesday approved a compromise bill to fund the government until March 4, 2011. After that, Republicans will have the chance to push through dramatic budget cuts.

“Today, we must balance our efforts to accelerate economic recovery and job growth in the near term with continued efforts to address the challenges posed by the long-term deficit outlook,” Treasury Secretary Timothy Geithner said in a letter accompanying the report. “The administration’s top priority remains restoring good jobs to American workers and accelerating the pace of economic recovery.”

Among key differences between the operating deficit and the cash deficit were sharp increases in costs accrued for veterans’ compensation, government and military employee benefits and anticipated losses at mortgage finance giants Fannie Mae and Freddie Mac.

The biggest increase in net liabilities in fiscal 2010 stemmed from a $1.477 trillion increase in federal debt repayment and interest obligations, largely to finance programs to stabilize the economy and pull it out of recession.

The federal balance sheet liabilities do not include long-term projections for social programs such as Medicare, Medicaid and Social Security, but these showed a positive improvement.

The report said the present value of future net expenditures for those now eligible to participate in these programs over the next 75 years declined to $43.058 trillion from $52.145 trillion a year ago — a change attributed to the enactment of health-care reform legislation aimed at boosting coverage and limiting long-term cost growth.

The overall projection, including for those under 15 years of age and not yet born, is much rosier, with the 75-year projected cost falling to $30.857 trillion from last year’s projection of $43.878 trillion.

The report noted, however, that there was “uncertainty about whether the projected reductions in health care cost growth will be fully achieved.”

By David Lawder
WASHINGTON | Tue Dec 21, 2010 6:46pm EST

Source: Reuters

Related information:

$2 Trillion Debt Crisis Threatens to Bring Down 100 US Cities Next Year

Federal Reserve To America: We Will Continue To Nuke The US Dollar!

US: Highest November Budget Deficit On Record

US Home Values: $1.7 Trillion Drop in 2010 – $9 Trillion Drop Since June 2006!!!

14 Pieces Of Bad Economic News That Are So Horrifying You Might Not Want To Read Them Standing Up

Catherine Austin Fitts: The Looting Of America

America – The End of Liberty (Documentary)

QE2 – The Day After: Entire World Blasts Deranged Madman Bernanke’s Uncheckable Insanity

Federal Reserve Will Surpass China As Top Holder Of US Debt By The End Of The Month: Shit Just Got Real!

Federal Reserve To Spend $600 Billion More To Destroy The US Dollar And The Middle Class

US Debt Has Increased $5 Trillion Since Speaker Pelosi Vowed, ‘No New Deficit Spending’

Prof. Kotlikoff: ‘The US is bankrupt’, Government Debt At $200 Trillion – 840 Percent of Current GDP

The Dylan Ratigan Show with Prof. William Black: ‘Fire Holder, Fire Geithner, Fire Bernanke’

Elite Puppet President Obama Exposed (The video exposes also several other puppet administrations.)

Analyst: ‘America Is Practically Owned By China’

US: Broke Cities Ask Broke States For Help

Three Horrifying Facts About the US Debt ‘Situation’:

#3: The US will Default on its Debt

… either that or experience hyperinflation. There is simply no other option. We can NEVER pay off our debts. To do so would require every US family to pay $31,000 a year for 75 years.

Bear in mind, I’m completely ignoring the debt we took on with the nationalization of Fannie and Freddie, AIG, and the slew of other garbage we nationalized or shifted onto the Fed’s balance sheet. And yet we’re STILL talking about every US family making $31,000 in debt payments per year for 75 years to pay off our national debt.

Obviously that ain’t going to happen.

Leave a Comment