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Friday, August 20, 2010

Understating the Deficit

The Associated Press reports that the current fiscal year’s federal budget deficit will fall short of a record, coming in at over $1.3 trillion, but below last year’s record $1.4 trillion, when the year ends September 30. But something is wrong with the AP’s information.

The U.S. Treasury says the national debt at the end of last fiscal year was $11.9 trillion and a year earlier was $10.02 trillion. Let’s do the math: 11.9 – 10.02 = 1.88. That means last year’s deficit was $1.88 trillion, not $1.4 trillion.

Did the AP get its incorrect number from the Office of Management and Budget?

HT: Ken Sturzenacker

  • Sheldon Richman is the former editor of The Freeman and a contributor to The Concise Encyclopedia of Economics. He is the author of Separating School and State: How to Liberate America's Families and thousands of articles.