Last year, Prime Minister Rajoy revealed that Spain’s budget deficit was 8.5%, which was raised to 9.4% while no one was looking.
This year, Rajoy just announced that Spain’s budget deficit will come in at less than 7%. This number is fictitious, but the MSM is not scrutinizing these figures. Journalists can write, but they can’t add. In my recent post, Reality of Numbers Trumps Spanish Obfuscation | DARECONOMICS., I reviewed the Spanish budget numbers and wrote
The Spanish government issued €146bn in new debt for 2012. This figure does not include the rising amount of IOUs to government suppliers, the drop in the government’s cash position or intragovernmental loans from pension and other assorted funds to the central government.
Here is the one chart that matters:
Quite simply, if Spain’s budget deficit was only 7% of GDP for 2012, then its debt pile would have only rose about €73bn. Last year, the rise in debt-to-GDP ratio is the same as the budget deficit, €92bn or 9.4%.
The Financial Times and other MSM outlets cannot rely on the numbers emanating from these crisis countries. They have huge incentives to lie. Spain has correctly ascertained that no one is paying attention, and it has decided to create numbers out of thin air in order to retain debt market access.