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Federal Budget 2012

The central government publicly said that our fiscal deficit was $318 billion in 2010, but in truth, it was significantly higher.

Government uses an accounting procedure called ‘Cash accounting’ to manipulate deficit numbers to convey a reduced deficit in public. If practiced by a U.S. corporation, it would be against the law. One can compare this method to a bank account’s total, which gives you an idea of day-by-day balance, but leaves out debits yet to be paid. In the same way, government has not been bookkeeping properly a steady depletion due to Medicare and Social Security programs. Without this oversight, the Federal budget deficit is significantly higher. Will the Federal budget in 2012 and years ahead continue using such practices that keep the public in dark?

Some parliament members are pushing for an amendment. They are petitioning for honest bookkeeping measures in the country. This is necessary for senators to monitor the situation better and formulate ideal policies. Adherents of open bookkeeping procedures state that it is time for legislature to be clear-cut and frank about bookkeeping practices, particularly when there are questions on feasibility of programs like Social Security, Medicare and government retirement funds. Such a bill was presented in the House. The proposal advocated inclusion of long-standing outflows in openly broadcasted Federal Budget from year 2012. However, the proposal fell apart when governing body and legislative members could not concur over the figures.

It is imperative for any government not to delude itself or try to conceal information from the public in such a derogatory way. The people of America need to press for the idea to run a balanced budget in both the Republican and Democrat minds. If one wants sound economics to prevail, at the end of day sound monetary policies need to be framed and put into practice. Else, our Federal Budget in 2012 and years to come will continue mounting huge deficits.