US sovereign debt mounts by $2 trillion to $13.473 trillion

America has mounted further up the hill of its sovereign debt in fiscal 2010 with net liabilities reaching over $2 trillion according to a US Treasury report.

The central bank’s Financial Report of the United States that uses corporate-style accrual accounting methods to Washington reveals that government's liabilities exceeded assets by $13.473 trillion. That compared with a $11.456 trillion gap a year earlier.

Unlike the normal measurement of government intake of receipts against cash outlays, accrual accounting measures costs such as interest on the debt and federal benefits payable when they are incurred, not when funds are actually disbursed.

It was under former Treasury Secretary Paul O'Neill, the first Treasury secretary in the George W. Bush administration, when the report was founded. The idea was to illustrate the mounting liabilities of government entitlement programs like Medicare, Medicaid and Social Security.

The government's net operating cost, or deficit, in the report grew to $2.080 trillion for the year ended September 30 from $1.253 trillion the prior year as spending and liabilities increased for social programs. Actual and anticipated revenues were roughly unchanged.

While the budget deficit dropped in fiscal 2010 to $1.294 trillion from $1.417 trillion in 2009 the $858 billion tax cut extension package enacted last week means that the above $1 trillion level will be kept for another year.