Budget Deficit Lies: What's the Real Deficit?


The Office of Management and Budget announced a 2019 budget deficit of $984 billion. What is it really?

Budget Deficit Debate

I covered this debate in detail earlier, but let's start with absurd nonsense.

Trump on Paying Down the Debt

That is truly Fantasyland thinking. In fact, it is so preposterous, one has to wonder if it is a purposeful lie. Then again, we are talking about Trump, so perhaps he does believe it.

Discrepancy Between Deficit and Rise in Debt

With that joke out of the way, let's investigate the discrepancy between increase in debt and the alleged deficit from my March 19, 2019 article:

Projected US Budget Deficit Lie in Four Pictures

Data for these charts from US Government Debt, not an official government website.

Projections vs Reality

In nearly all cases, the increase in national debt is way higher than projected deficits. Why?

Because the projected deficit does not include all of the amount owed to the Social Security Trust Fund. That amount is called off-budget. But when the calendar year rolls over, the difference magically appears on the balance sheet as actual debt.

Actual and Projected Debt

Image placeholder title

Projected Deficits vs Projected Increases in Debt

​That picture is where lie meets reality. Let's total it up.

Image placeholder title

Projected Deficits vs Projected Increases in Debt Totals Through 2023

Image placeholder title

The total projected debt increase for 2018-2023 is $6.826 trillion.

The total projected deficit increase for 2018-2023 is $5.352 trillion.

Deficit Scam

Excluding Social Security from the deficit is an accounting scam.

The cumulative deficit lie for the years 2018-2023 is $1.473 trillion.

Expect Much Worse

The story is even much worse. Those numbers assume no recession through 2023.

Mike "Mish" Shedlock

Comments (41)
No. 1-12

'Those numbers assume no recession through 2023'. I'm convinced there'll be one...possibly several. 'Luckily' they've concocted with the CB's having close to zero (or possibly negative) interestrates. If rates were 'normal' or 'fair, that would be disastrous. And indeed, by purposefully excluding the retirementboom it's just another case of propping up numbers to fit the 'everything-is-awesome-dude'-narrative. In your 'Chicago's Death Spiral' topic, there were some shocking numbers to observe and that's just one (1) city!

Country Bob
Country Bob

Clapper, Brennan and Comey have not only evaded the law, they have unzipped their flies and pee'd all over the Constitution.

Who cares about the budget of an entity that allows the lawlessness that Washington DC has become?

Send the crooks to prison or shut the whole thing down.

"That government which governs least governs best" -- Thomas Jefferson


Who's knows,under all the scam accounting, blatant off balance sheet fraud,big govt hiding at least a tril off the books,and that's a low ball number,real deficit could easily be double (triple)the "official"number.


Oh don't get me started Mish, I am on the record as saying this year's deficit would be 1.2 trillion and growing fast. But, how can we know? That is a great question since we have not had a real budget in how long? What we have are continuing resolutions and the great cliff that requires they lift the debt ceiling. That debt ceiling, biggest joke in US political history.

But, you did say this and I want to STRONGLY disagree with you for a change: "Unfunded liabilities like SS add to the debt but supposedly to to the deficit until realized."

Social Security is not an unfunded liability, and I would challenge anyone who uses that term as being biased and politically wielding an ax for the right wing.

Social Security is actually OVER FUNDED to the tune of now more than $6 trillion, that is why that much of the federal debt shows up as "intergovernmental holdings." Now that really is a lie, intergovernmental holdings is just another way to say the money we have already stolen from your retirement check. In the end though the federal government is legally obligated to pay my social security benefits out of the general fund which took the money we overpaid.

"Legally obligated" is a catch phrase for the benefits will keep rolling no matter what, even if they have to borrow those trillions elsewhere, unfortunately that elsewhere is likely to be the Fed which will print it up and stick us all with inflation that will moot the cost of keeping the old and disabled alive. Just because they are LEGALLY OBLIGATED to pay my benefit and also to adjust that for annual inflation does not mean that I can get by on what they pay. Because the federal government and the Fed acting together control monetary policy, fiscal policy, and the printing press. They can claim a can 4 ounce can of tuna costs the same as 5 and 3/4 ounce of tuna all they want to, I just know that it costs me about twice as much as it did in 2011.

The place the whole unfunded liability meme got started was in Illinois, and only because that state pretty much has had a perfect storm of problems, and because they do not have any control over such events as 299% increase in healthcare costs since before the GFC. Or more than 165% price increase in college for their kids. And none of that is reflected in the CPI which is now nothing more than a plug number made up to promote Fed and Federal policy of handing all the wealth of this nation to the top 1%. They did not over promise benefits, they just had no idea about the depth of financialization and inflation when they promised it. REAL INFLATION is now multiples of what the headline bullshit numbers are and if you are broke and in trouble it must be YOUR fault, not the Fed or federal government that tells us prices are pretty much the same as when Clinton left office.

The real problem with the idea of unfunded liability is that businesses and people do not work on the same basis as government, and because we no longer have an annual budget that unifies income and outgo even the government does not work on that basis anymore, they should but they don't. If they did there would be in essence a pile of cash worth over $6 trillion sitting in the head office of social security right this moment. Far more than enough to pay my benefit, at a REASONABLE raise for inflation.

Our accounting is so very fucked up it is not funny, the only countries worse are China, the EU, Japan and, well all of them, christ, look at Canada. Because you cannot mix cash accounting with accrual accounting, it does not work, doesn't add up. Right wingers have taken advantage of this to claim our system is a failure, no matter that the wealth and claims on that wealth have not actually changed.


Two things I know for sure about Social Security,, well maybe three or four.. A long time ago the Supreme Court ruled payments to SS are a Tax and not an insurance premium. Also a long time ago the Supreme Court ruled that the government doesn't have to give anyone any of this money. (Meaning you're not entitled to your entitlement)!!

Also there is no money in the SS lockbox, just IOUs, and IOUs aren't money, they are paper more worthless than paper money...

Also, but not finally, the whole thing is UnConstitutional, there is nothing in the Constitution authorizing the federal government to take money from me and give it to thee...


Mish; you can avoid much of your misery by moving to Canada.

US Federal Debt 22 trillion. Canada federal debt 0.768 trillion.

US federal deficit 1242 billion. Canada 20 billion.

US Social Security : no fund, just ious. Canada Pension Plan : an actual investment fund with investments all over the world, averaging close to 10% annual return.

And you don’t have to directly pay to see a doctor or go to a hospital.


Trump is probably still the favorite to win 2020, so by the end of his second term we could see roughly $2T annual deficits.

I hope by now everyone realizes that no politician is going to address this, it's "extend and pretend" from here on out. At least once we go to NIRP servicing this colossal debt will be easy!


The obvious solution is to cut taxes and regulation! Get government off the backs of the people! Those lazy old people need to grab their walkers and get back to work! Bunch of takers!


I am so tired of the BIG LIE of "Republicans are deficit hawks and Democrats and big deficit spenders". This lying talking point gets repeated all the time. The TRUTH is that Democrats close budget holes while Republicans tear them open. When was the last surplus? Democrat Clinton. What did Obama do? Reduced the deficit his entire term in office. Republican Bush took a surplus and destroyed it with tax cuts. Republican Trump took a reducing deficit and flipped it into a wildly increasing deficit. Republicans have no interest in solving the budget problem. This (despite the identity politics BS) is enough to cause me to vote Democrat. The Republicans want to destroy. What do you want to do? Fix a problem or make it worse?


The social contract has been broken for a while now. And how convenient is it to have a polarized society, where the left blames the right and vice versa. Then each side has a scapegoat and nothing gets resolved, the inequality keeps rising and social unrest is the new normal. I'd like to think I'm neither left or right, but just in the centre. More than that, I often think this paradigm is nearing the end of its lifespan. Clearly, this isn't working anymore and perhaps these are the final deathrattles of the system collapsing and dying. And I'll say it again, it's unregulated finance, extreme financialization or everything, especially housing that's accelerating the fire that's burning.