The Hidden Deficit

By: Maged Taman

There is two deficits that are known to us the budget deficit and the trade deficit*. The first is the difference between the expenses and revenues of a country and the second the difference between its imports and exports. There is also hidden deficit. To understand it I will give you these examples:

1- Weapons: say you produced weapons over one year of 300 billion dollars and you did not use them and they became after few years obsolete. We have lost this money.

2- Wars: imagine you used them in a war you lost a lot of them and you destroyed other weapons that cost the planet as a whole more billions of dollars. Failure to make our enemies our friends contribute much for that.

3- There is a cheap energy there that we did not discover it and use it and we spent a lot of money on other energies.

4- Current energies with global warming that have a harmful effect and cost us a lot of money related to pollution, natural disasters and health care.

5- Healthcare system that do not encourage healthcare for all or save in the lost money. Read Taman Health Plan to know many of the examples.

6- Diseases that are preventable and we let them destroy the productive people over the world.

7- The mini-hidden deficit we all contribute to like the light we leave turned on while unused, food we threw away, water running unnecessarily and so forth.

If you note in many of them too much activities and a little accomplishments. I call this the third deficit or the hidden deficit, or Taman Deficit if you want to give me some credit. The problem of the hidden deficit it contributes to our national deficit and debts (accumulated deficit). We have to pay the debt and the more we wait the more the interest on the debt. We may leave our children with a big burden in the future if we do not take care of that sooner (economists call it generational accounting).

*From: http://www.wikipeida.org/

Budget deficit occurs when an entity (often a government) spends more money than it takes in. The opposite of a budget deficit is a budget surplus. Debt is essentially an accumulated flow of deficits. In other words, a deficit is a flow and debt is a stock.
An accumulated deficit over several years (or centuries) is referred to as the government debt. Government debt is usually financed by borrowing, although if a government's debt is denominated in its own currency it can print new currency to pay debts. Monetizing debts, however, can cause rapid inflation if done on a large scale. Governments can also sell assets to pay off debt. Most governments finance their debts by issuing long-term government bonds or shorter term notes and bills. Many governments use auctions to sell government bonds.
Governments usually must pay interest on what they have borrowed. Governments reduce debt when their revenues exceed their current expenditures and interest costs. Otherwise, government debt increases, requiring the issue of new government bonds or other means of financing debt, such as asset sales.

The balance of trade (or net exports, sometimes symbolized as NX) is the difference between the monetary value of exports and imports in an economy over a certain period of time. A positive balance of trade is known as a trade surplus and consists of exporting more than is imported; a negative balance of trade is known as a trade deficit or, informally, a trade gap. The balance of trade is sometimes divided into a goods and a services balance; especially in the United Kingdom the terms visible and invisible balance are used.