'Fiscal gap' grew by $11 trillion last year

Rick Moran
According to Bloomberg, the "Fiscal Gap" is the true measure of debt. The gap "is the present value difference between projected future spending and revenue. It captures all government liabilities, whether they are official obligations to service Treasury bonds or unofficial commitments, such as paying for food stamps or buying drones." The U.S. fiscal gap, calculated (by us) using the Congressional Budget Office's realistic long-term budget forecast -- the Alternative Fiscal Scenario -- is now $222 trillion. Last year, it was $211 trillion. The $11 trillion difference -- this year's true federal deficit -- is 10 times larger than the official deficit and roughly as large as the entire stock of official debt in public hands. This fantastic and dangerous growth in the fiscal gap is not new. In 2003 and 2004, the economists Alan Auerbach and William Gale extended the CBO's short-term forecast and measured fiscal gaps of $60 trillion and $86 trillion, respectively. In 2007, the first...(Read Full Post)

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