Cooking the Books

Washington fights the deficit with creative accounting

When David Stockman addressed the board of the New York Stock Exchange last month, he was astonishingly frank about the Government's use of subterfuge in putting together the budget. "We have increasingly resorted to squaring the circle with accounting gimmicks, evasions, half-truths and down right dishonesty in our budget numbers, debate and advocacy," said he. "Indeed, if the SEC had jurisdiction over the Executive and Legislative branches, many of us would be in jail."

If not an outright fraud, the process of drafting a federal budget has become an exercise in creative writing. The one passed by Congress last year projected...

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