Federal Government Finances Deteriorated by $6.5 Trillion in 2012

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APA
Agresti, J. D. (2013, January 30). Federal Government Finances Deteriorated by $6.5 Trillion in 2012. Retrieved from https://www.justfactsdaily.com/federal-government-finances-deteriorated-by-6-5-trillion-in-2012/
MLA
Agresti, James D. “Federal Government Finances Deteriorated by $6.5 Trillion in 2012.” Just Facts. 30 January 2013. Web. 23 September 2019.<https://www.justfactsdaily.com/federal-government-finances-deteriorated-by-6-5-trillion-in-2012/>.
Chicago (for footnotes)
James D. Agresti, “Federal Government Finances Deteriorated by $6.5 Trillion in 2012.” Just Facts. January 30, 2013. https://www.justfactsdaily.com/federal-government-finances-deteriorated-by-6-5-trillion-in-2012/.
Chicago (for bibliographies)
Agresti, James D. “Federal Government Finances Deteriorated by $6.5 Trillion in 2012.” Just Facts. January 30, 2013. https://www.justfactsdaily.com/federal-government-finances-deteriorated-by-6-5-trillion-in-2012/.

By James D. Agresti
January 30, 2013

In January 2013, the U.S. Treasury released its annual “Financial Report of the United States Government,” which presents an “accrual” accounting of the federal government’s finances. In contrast to the White House budget, which primarily uses “cash” accounting, this Treasury report uses accounting standards like those that the government requires of large corporations.

Based on this newly published data, Just Facts calculates that our national government has $67.4 trillion in debts, liabilities, and unfinanced Social Security/Medicare obligations. This represents a significant deterioration over the past year. Although the official federal deficit for fiscal year 2012 was $1.1 trillion, this comprehensive accounting reveals that the federal government’s fiscal position deteriorated by $6.5 trillion—or an average of $53,000 per household.

Beyond the commonly cited national debt, the accrual accounting methods used in this Treasury report account for other federal financial obligations, such as retirement and healthcare benefits for federal employees, liabilities from government-sponsored enterprises (like Fannie Mae and Freddie Mac), and obligations to current participants in Social Security and Medicare that exceed the programs’ dedicated revenues.

The report also accounts for federal government assets, such as cash on hand, certain properties and equipment, and stocks in companies such as General Motors. The report, however, does not account for federal stewardship land and heritage assets, such as national parks and the original copy of the Declaration of Independence. While these items have tangible value, the report explains that the government “does not expect to use these assets to meet its obligations.”

In total, the federal government’s comprehensive fiscal shortfall now equals $214,000 for every person living in the U.S. or an average of $557,000 per household. The precise methodology for computing these figures is detailed in Just Facts’ national debt research, which will soon be updated with this new data. This research also shows that this shortfall is based upon federal agency projections that incorporate some highly optimistic assumptions. As such, the true shortfall may be considerably worse.

Further reading:
The Reality of the Federal Government’s Fiscal Hole

Consequences of the National Debt

Paul Krugman’s claims about the dangers of government debt

13 thoughts on “Federal Government Finances Deteriorated by $6.5 Trillion in 2012

  1. Pingback: US Deficit Keeps Going Up | Jorge Pereira

    • These figures are primarily the federal government’s accounting. I am merely adding up the line items in a logical and transparent manner. I don’t need Ernst and Young to do that.

      • Then can you provide your analysis of how you arrived at the 6.7 trillion because it seems you are using “balances” of liability items at a point in time which equates to a Balance Sheet analysis rather than a “profit” or “surplus/deficit” analysis. Until such time as I know your complete methodology I cannot accept it at face value.

          • Sorry Jim but that link is just a proliferation of data with no succinct reconciliation of the 1.1 trillion and the 6.5 trillion amounts that I can see.

            Are you saying that the 2012 deficit was actually 6.5 trillion or just that the net financial position (read Balance Sheet) changed by that amount.

            There is more to the change in the net financial position than just the annual deficit.

            Folks reading the article could be forgiven for being confused.

            • Mr. Wills, Please read the article carefully. The $1.1 trillion figure is documented in the article via a hyperlink (to the U.S. Treasury) placed directly on the text “$1.1 trillion.” As the article states, this figure is the “official federal deficit for fiscal year 2012.”

              The $6.5 trillion figure is the result of simple addition and subtraction. As the article explains, “the national government had $67.4 trillion in debts, liabilities, and unfinanced Social Security/Medicare obligations” at the end of fiscal year 2012, and this is $6.5 trillion more than last year. The link I provided in the article (and then again to you in this dialogue) documents that this figure was $60.9 trillion at the end of fiscal year 2011. Thus, $67.4 trillion minus $60.9 trillion equals $6.5 trillion.

              • Yes, I see that and could glean that myself. Simple question, are you saying that the true deficit for 2012 was 6.5 not 1.1 trillion?

                And how do the debt figures you are using play into the $16.4 trillion national debt?

                What is your calculated deficit for 2012?
                What is your calculated National debt at the end of fiscal year 2012?

                I am simply trying to understand your logic and reasoning here and equate/reconcile this with the government figures.

                No link or data you have provided sets this out.

                • If you “could glean that” for yourself, you wouldn’t have asked the questions that you did. Sorry, but I won’t waste any more time with such nonsense.

                  • Then I won’t waste any more time with your web site as your response is a typical right wing reply to being called to account for less than obvious assertions made and only serves to confirm my initial thoughts.

                    • Peter, does your brain work at all? This article is not only crystal clear but also very accurate. These are all OFFICIAL data. What’s wrong with you?

                      Thanks.

  2. Well, so what’s new here? The accounting methods are the same as have been used probably for a very long time. Why don’t you go back and do the same thing and write about the deltas for GOP administrations. After all, wasn’t it Cheney who infamously said, “Deficits don’t matter?” This whole deficit stuff is another manufactures crisis which the GOP have become most proficient at creating–of course, with the Dems and POTUS’s help.

    Regarding biases, here’s an article that will be of interest:
    http://59ways.blogspot.com/2013/01/bias-blind-spot.html

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