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US budget includes 13-figure error, says ex-Treasury sec

The first budget from the current US administration includes an alleged error that would fail a student taking a basic economics course.

That is the verdict of Larry Summers, a one-time Treasury secretary. He said that it is the biggest error in accounting he has seen from the White House in the just under four decades he has been following them.

Summers, in his blog post, said that the error hurts the credibility of the economic assumptions that Summers described as “ludicrously optimistic” in the first place.

The issue is President Donald Trump’s $2 trillion (£1.5 trillion) in tax cuts, listed by the administration as revenue neutral because they are neutralised by further tax generated from anticipated growth.

The budget further claims, however, that the very same cuts will assist the economy in achieving 3% growth, which effectively means that they are being counted twice.

Summers added:

“This error is akin to buying a company assuming that you can make investments that will raise profits.

“But then, in calculating the increased profits, counting the higher revenues while failing to account for the fact that the investments would actually cost some money to make.”

If the White House can make such a catastrophic error, SMEs are certainly capable of making costly mistakes in their accounting books too. That is why it is crucial that they hire the best accountant that they can afford.

There are no shortage of options when it comes to employing the services of accountant in the Wirral – a fact businesses of all sizes would be wise to explore.

Posted by Mark
June 1, 2017
Finance

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