The deficit has moved beyond practical fiscal control!
When the U.S. Treasury reported the official 2004 federal budget deficit at a record $413 billion last October, the hisses and boos in the financial media were unrelenting. Two months later, the Treasury reported the actual 2004 deficit -- using generally accepted accounting principles (GAAP) -- was really an incredible $11.1 trillion, up from $3.7 trillion in 2003, yet nary a word was heard in the financial media, from Wall Street or from any political denizen...
The silence partially reflects the financial-market terror that would accompany an effective national bankruptcy. Such is the risk when a government's fiscal ills spin so wildly out of control that they no longer are containable within the existing system.
Consider the traditional solution of raising taxes. Putting the $11.1 trillion deficit in perspective, if the government raised individual and corporate income taxes to 100%, seizing all salaries, wages and profits, the government's 2004 operations still would have been in deficit by trillions of dollars. The deficit has moved beyond practical fiscal control! Many in government and the markets are aware of the underlying deficit reality, but few dare to sound the alarm, for the ultimate resolutions to the situation all are political or financial nightmares.