Fire Hose Spending

President Obummer is leaving office the way that he came in... with crushing increases in our federal debt ... see: CNS News Article and above chart. Our national debt increased in just-ended fiscal 2016 by $1.42 trillion, compared to his first year in office, 2009, when our debt increased by $1.89 trillion ... driven mostly by an over $800 billion stimulus package. However, this current $1.42 trillion debt increase compares to a projected deficit for fiscal 2016 of $590 billion. Should not these two numbers be the same? Very perplexing ... especially since we are living a public relations lie that it is the size of our national deficits that count toward our fiscal prudence ... when it is really the growth in our national debt that counts most in judging our degree of peril.

Moreover, the difference is that in 2009 there was a rationale for all this fire-hose spending ... to help pull the United States out of the great recession caused by the housing bubble bursting. Now this country, theoretically is not in extremis, so why is our debt growing almost as rapidly ... and why is there such a disconnect between our deficits and the change in our national debt? I have found one brave soul who has tried to rationalize this difference ... see: Wolf Street Article. The possible explanations given therein ... from hidden defense spending to the Social Security surplus ... cannot account for this huge 2016 disparity of $830 billion between our current deficit and our increase in our indebtedness. This article concludes with no real explanation.

However. I think I might have the answer ... and that, like most roads to fiscal hell, is fuzzy accounting. By this I mean that our federal government has not established hard and fast rules in how to apply cash versus accrual accounting methods ... see: The Hill Article. So, as a result, different government agencies use whatever method is most advantageous to their spending desires. They can and often do spend cash on things (both needed and unneeded) and don't enter it in the books as an accrued expense until subsequent fiscal years ... or, less often, do the opposite. This is how our government could increase our debt by $340 billion in one single day last fall. It had accrued expenses until Congress passed the debt ceiling increase ... and then booked all this as cash out of pocket on the debt ledger. And, since these accrued expenses were not required to be shown under existing deficit cash accounting methods, they were hidden from Congress and the American public.

This is an insane way to run a government ... particularly one that can't seem to shut off the fire-hose spending hydrant.

Afterward: I realize I didn't address the second part of my query ... how come the $830 billion 2016 fiscal year disparity between our reported deficit and the increase in our debt? Perhaps the $150-$200 billion we gave to Iran may be part of this delta?