What the Federal Budget Is Hiding
Paul Ryan wants to reveal the true cost of government
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The federal government does two things every year that make it like parents. It lends money to its citizens, and it co-signs on loans for them. Just like parents, the government fibs a little to itself about the likelihood of these loans being paid back. It assumes that they carry no “market risk,” that is, the possibility that everything in the economy will go bad at once.
According to the Congressional Budget Office, if the government included market risk in its budget, programs like student loans and mortgage guarantees from the Federal Housing Administration, which are projected to bring in $45 billion in the 2013 budget, would suddenly appear to be headed for losses of $11 billion.