Others are claiming that we are approaching the "perfect storm" of economic factors that will make the Great Depression look like a picnic. They cite things like our $489.4 billion trade deficit, the fall of the dollar against other currencies and particularly the Euro where it is expected to reach 1.40 to one by the end of the year, the constant "outsourcing" of jobs to third world labor, and the fact that countries like China, Japan, and others may find other sources for investment instead of loaning our government money when such investment in Treasury securities doesn't help Americans buy their products.

What bothers me is how our government can talk about recovery when their own revenue is down. If you had less income month after month, would you pretend that things are getting better?

Last year, fiscal 2003, the federal tax base was $70.9 billion less than the previous year, and the previous year was horrible. Fiscal 2002, was $137.8 billion below the year that preceded it, fiscal 2001.

So far this year, personal income taxes are down by about $8 billion at the end of January, but corporate taxes are up about $13 billion. Too bad corporate taxes are only accounting for about 7 percent of total revenue.

You can follow this yourself at the back of the U.S. Treasury's Monthly Reports where table #8 summarizes Receipts and Outlays. I usually download this report in PDF format, then click to the last page and back-up two pages. You can also subscribe to notification every month.

You could say that because the shortfall in revenue is getting smaller and smaller, things are getting better. No doubt, this is the way the Bush administration looks at it. And it would be true if it wasn't for the fact that the government keeps planning bigger and bigger budgets that should rightly require larger and larger taxes. They are now planning a budget at least $600 billion larger than the best income they've had in the last few years. Does that make sense to you?

Of course, deficits are skyrocketing. What was supposed to be a deficit of $370 billion this year, fiscal 2004, is now estimated to be $510 billion. And that does not include money borrowed/stolen from entitlements like Social Security—surplus entitlement money that was planned into the budget under "off budget" revenue.

But no one has ever explained where surpluses came from, have they? The pundits that tell you "surpluses are gone" are lying through their teeth.

Usually they cite the wonderful fiscal 2000 surplus of $237 billion. But they don't tell you that $87 billion of that surplus came from income tax overcharges—and $149.8 billion came from stealing entitlement surpluses. In that year, Social Security alone produced a surplus of $95.4 billion.

More interesting is the next year, fiscal 2001, when we had the "second largest" surplus in U.S. history—a surplus of $127.2 billion. And guess what, at the same time we had a $33.5 billion deficit—shortfall in personal income and corporate tax revenue. The only thing that made a surplus possible was that $160.7 billion was stolen from entitlement overcharges with Social Security leading the pack at $98.7 billion. Subtract the $33.5 billion deficit from the $160.7 billion entitlement surplus and what do you get? (See: Deficits)

Of course, all of this was possible through the "Unified Budget" method of accounting. If they applied the same trick to today's revenue, it would look ridiculous.

But the same surpluses that allowed the government to show these two years of wonderful surplus are still there. Even with high unemployment, fewer payroll tax contributors, others working part-time, and many taking jobs at lower pay, Social Security still produced a surplus of $82 billion last year, fiscal 2003, and the rest of the entitlements came up with another $60 billion or so for a grand total of more than $140 billion spent elsewhere by the government. That's not chicken feed.

The outright theft of entitlement money gets into the "Pay-It-Again Sam" scam where, pretending to "borrow" entitlement money, the government has set up phony trust funds that have no other purpose than to double tax us plus interest.

Taking just one example to illustrate this point, let's look at the Unemployment Trust Fund. At one time, in June of 2001, this trust held $91.6 billion in debt markers; i.e., nonmarketable bonds. At the close of fiscal 2003, this trust held $48.2 billion in the same markers. That means that the taxpaying public has been double taxed (plus annual interest) to the tune of $43.4 billion in the past two years or so, not counting the first four months of this year where another $10.7 billion has been drawn down.

The reason for this is that unemployment taxes from employers have not been sufficient to cover benefits and extended benefits for those laid off and eligible. Employers have still been paying their taxes, but it just isn't enough to cover all of the benefits.

The eligible unemployed are still getting their benefits, but the government must either take the money from current tax receipts, shorting other programs, or borrow the money honestly by selling Treasury securities in the bond market. Either way, the taxpaying public covers it, now or in the future.

By their own admission, there are no viable assets in the trust funds to cover these expenses. Given the revenue problems covered above, you can be pretty sure that the government borrowed the money from investors in order to cover costs like this.

The lesson here is that if you want to see the true deficit our nation is running, you are better off following the national debt. The national debt reflects amounts borrowed/stolen from entitlements like your retirement insurance premiums plus the annual interest handed these accounts without any money involved but increasing your indebtedness—another pretense the government pulls. This time, trying to imitate the minimum amount your money would have made if invested properly.

In fiscal 2003, the Bush administration ran up the national debt $555 billion. This year, fiscal 2004, we are headed for the $700 billion mark.

Both President Bush and Secretary of the Treasury John Snow have recently said that the national debt limit should be increased another trillion dollars when it was just increased by that amount last May. We are headed "To The Moon, Alice" with a national debt that taxpayers will be forced to pay-off someday.

There are very definite ways corrective action could be taken, but not with a dishonest government, a complacent public, and candidates for office that will not even discuss the subject forthrightly.