Originally Posted by You
The federal budget ran a surplus for four years in the 1990s.
Unfortunately, that surplus may well have been accounting fiction for a couple reasons.
>> 1. The proceeds from sale of assets obtained in the S&L bail-out of 1987 were counted as revenues even though they were not ongoing.
>> 2. The proceeds from sale of former federal real estate also were counted as revenues even though they not only were not ongoing, but also generated higher future expenses for lease of replacement facilities.
Amplifying on the second, the military "Base Realignment and Closere" commissions (BRAC's) of that era generally moved units out of bases owned by the federal government to facilities leased by the federal government. This permitted widespread sale of the lands that had been military and naval bases.
So we're really looking at a situation in which revenues from sales of assets may well have masked operating losses. The present Generally Accepted Accounting Principles (GAAP) would require a corporation to account for such revenues separately to show the operational situation as accurately as possible, but the federal Treasury Department does not follow GAAP in this regard.