Only a greedy banker dealing with a gullible customer could have suggested such an idiocy with a straight face. Or a corrupt financial writer pawning off editorials as bankers' ads?

Had any "normal," Main Street, American businessman suggested that debt is good; that the more you owe, the better off you are; he would have been run out of town, Anytown, USA, like a mad dog. Or taken to the town's square for public display and ridicule, before being cast in bronze as a Statue of Moron.

Except on Wall Street. That's where talking crazy is normal; doing normal is crazy; and the bronze statues of morons are revered as Golden Calves. Crazy, normal, bronze or gold... Rich, poor, shy or bold... On Wall Street, anything can be sold. Even a snake oil remedy for our public debt. All it takes is bum media proffers.

"Of course, the U.S. (government) must pay interest (to the Wall Street bankers), which comes out of the annual budget," the Journal eventually conceded, way down in its editorial, but only after first glorifying the virtue of a large national debt. "But so what?"

But so what? So what that about $243 billion goes straight from the U.S. taxpayers' pockets into the debtor accounts, according to the Congressional Budget Office (CBO - which the Journal cited), just for servicing our $3.7 trillion debt? That's more money than ALL tax revenues Uncle Sam collected in 1998 from all of Corporate America ($189 billion).

Wait a minute, the U.S. Treasury officials could argue. The U.S. public debt was $5.6 trillion in 1998, not $3.7 trillion, according to their records. And the interest which the government paid last year was $364 billion, not $243 billion.

See what we mean? What's a trill here, a trill there, when you're spending someone else's trillions? The discrepancy between the CBO and Treasury public debt figures was nearly two trillion dollars.

So, we went to work trying to sort out all these congressional and bankers' t(h)rills at the expense of the U.S. citizens' tax bills. And what we found was that the Wall Street media's arrogance is only exceeded by its treachery.

"I don't have the slightest where the (CBO) $3.7T figure came from???" a spokesperson for the U.S. Treasury's Bureau of Public Debt told me in an e-mail. "The 'marketable' part of the debt is down to $3,295 billion as of February 28, 1999, but the total debt was up to $5,622 billion."

The Treasury official explained that they use the term "marketable" "to identify those securities which can be bought and sold in the secondary market... regardless of who the seller(s) and buyer(s) are." The official also added a personal comment: "I don't know why Congress and the Administration use the '...held by the public' term, except that maybe it's more politically positive????"

Clearly. The CBO spokesman, Hank Cox, also said that the discrepancy between the congressional and the Treasury public debt figures was probably due to the "non-marketable" portion of the debt, to use the Treasury nomenclature.

"What's a 'non-marketable' debt?"

"It's the debt the federal government owes to itself, upon which it also pays interest," Cox explained. He pointed to a section of a CBO January 1999 report which said, in part:

"The Treasury has also issued more than $1.75 trillion in securities to various government accounts, mostly trust funds. The largest balances are in the Social Security trust funds ($730 billion at the end of 1998) and the retirement funds for federal civilian employees ($461 billion). The total holdings of government accounts grow approximately in step with projected trust fund surpluses. The funds redeem securities when they need to pay benefits; in the meantime, the government both pays and collects interest on those securities."

In other words, being in government business "is a life of Riley." When you run out of money, you create it out of thin air. Who would not like to be able to "borrow" from oneself, with your bank account empty, by merely signing your name on a piece of paper? Meaning, you just write yourself a few trillion dollars'-worth of IOUs, get the U.S. Treasury to sanction them as "real money," and off to the races you are.

And yet the bankers and the federal government tell us that there is practically no inflation in the U.S. economy, with the Consumers Price Index up only 1.75% in January. To which we say, bull! Add the $2.25 trillion of "non-marketable" debt created by the U.S. Treasury out of thin air to the calculations, and then watch the Wall Street tigers scamper like mice for their bolt holes. Most fat-cats won't fit the opening, of course. Which will mean plenty of dead meat for the fat-cat eaters.

Perhaps the only other business in which "value" can be similarly created out of thin air is Wall Street's stock buybacks. Which "normal," Main Street, American businessman would want to buy his company shares from himself so as to "boost the shareholders' value?" Only one who has ambitions to be bronze-cast one day as a Statue of Moron. For, that's using the money all shareholders earned for the benefit of only some (those who sell their shares to the company) - without creating any real economic benefit, either to the company or the nation's economy.

Yet $222 billion dollars was squandered on such scams by the publicly-held American companies in 1998 alone, according to a Mar. 16 Investors Business Daily report, $882 billion in the 1990s. That's more money wasted on this Wall Street fad, which we dubbed "Corporate Cabbage Patch Dolls" (see Annex Bulletin 98-39, 10/31/98), than we figure was invested in all developing countries in the world during the same period ($831 billion - see "Two Faces of Globalism," TiM GW Bulletin 98/12-6, 12/14/98).

And yet, here was the Journal not only applauding the stock buybacks, using the questionable CBO figures, but going on to obfuscate the public debt issue further by its vague projections. "The latest Congressional Budget Office (CBO) calculations show debt as a share of the U.S. economy rapidly declining toward its post World War II low of 23.9% in 1974," the Journal editorial claimed.

Maybe. But in what year, or what decade, if at all? The Journal never explained that the CBO report PROJECTED what MAY happen circa year 2005. If and if and if... all its rosy assumptions came to pass. Like:

• If the nominal U.S. GDP grows in the 3.8% to 4.6% range between now and then (ever heard of anyone from Washington ever predicting a recession?)
• If the inflation stays low (in the 1.7% to 2.1% range)
• If the unemployment does not rise above 5.7%
• If the interest rates also stay low (i.e., the 3-month T-Bills at 4.5%)
• If the next U.S. president isn't a liar [Just kidding. On the other hand... J ]

In other words, if a typical bureaucratic set of fairy-tale assumptions came to pass. While the actual public debt increased at a compound annual rate of 5.2% between 1989 and 1998 (per CBO's own figures), this congressional organization would have us believe that it would suddenly decline by a compound annual rate of 8.4% in the next 10 years?

No wonder that even some Washington bureaucrats begged to differ. Like that U.S. Treasury official. "I don't know how CBO developed it(s) projection...," he said. "The figures we (a the U.S. Treasury) show for the public debt and its components are based on an actual 'headcount.' We don't do projections here at the Bureau (of Public Debt), except when the Government is beginning to hit the debt ceiling and then our projections are just for a couple of weeks in advance; then we do them for a couple of days in advance; and then down to hours and minutes."

Interesting insight about how the Treasury reacts when the heat rises. But back to the Journal's "fun with figures"... The worst part was that this "respected" business daily with the largest circulation in the country chose to IGNORE the following excerpt from the CBO report:

"Since trust funds and other government accounts as a whole will continue to swell even as surpluses are projected to continue in the total budget, debt subject to limit will keep growing through 2005, from its level of $5.4 trillion at the end of 1998. In 2006, however, debt subject to limit is projected to decline after reaching a maximum level of $5.8 trillion." (emphasis added).

Bingo! So there is our $2 trillion "discrepancy" between the CBO and Treasury figures being virtually wiped out. In other words, no discrepancy at all! Only an outright deception by the Journal of its readers and the American public. And then this Wall Street's "Bankers' Herald" had the gall to suggest that, "the national debt, in short, is a political diversion... And the next time a politician claims to be doing you a favor of paying down the debt, tell him you want your money back."

Yeah, right. And the next time you see a snake oil salesman, you entrust your life's savings to him? Or vote for him to lead the country or a company?