12 July 2006

Who's paying for the War on Terror?

Dude, where's the Dharma: "Late last week I came across the first of what is now a collection of articles proclaiming an improvement in the US fiscal deficit. Being a skeptical sort I did a bit of cross checking, using government figures, mind you, and discovered there is both more and less to this tale than meets the eye.

On the 'less' side of the tale I find the 'improvement' in the deficit. The term 'deficit', at least as I understand it, is a flow figure. It refers to a shortfall of income relative to expenditure over the course of a period of time, usually a year. The sum of these deficits is a 'stock' figure, the debt. I bore you with this remedial accounting as preamble to my rather curious discovery. If, as the President, inter alios, avers, the deficit is shrinking, why is the debt still rising at a rapid pace?"

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