Monday, February 16, 2009

Operating at Limited Capacity

This title is a double entendre. Firstly, it speaks to my present inability to type very well since I have almost no use of my left arm for the next few weeks. So to that end, The Low Bar will be publishing at a very limited rate.

The other intent of the title references our US government and its handling of the economy. In what capacity is it limited? How about that of sanity and reason. Never mind all of the bailouts and stimulus cluster-f***s, how about standard operating procedure. It seems the Congressional Budget Office uses some backwards accounting practices to arrive at its numbers, which are different from the method nearly every other office uses, and that of Wall Street, which is GAAP accounting.

The skinny of the problem is this: the CBO says we have a budget deficit of $455 billion, when in fact it is $5.1 trillion. But the more scary number is that, if the CBO used GAAP accounting, we would have a future projected budget shortfall og $65 trillion. That's larger than the world's GDP.

Still think we're going to pull out of this?

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