"Big Bath" or "Big Lie" Accounting?

McArdle is not overly enthused by Obama's "Big Lie" budget claims. She starts with the concept:

Analysts have long recognized the tendency of companies who are forced to report bad news to make the news worse than they have to, piling every single thing that might goi wrong into one hell of a charge-off. The logic of this is simple: if your stock is going to take a hit, make it one gigantic hit, so that you can later "surprise" everyone when aliens from the Planet Zork do not actually land...

You can see a lot of that stuff in recent bank earnings reports (except the stuff about Zork.)

Now she shows how HopeyChangey is massaging numbers--with the objective of making himself look good.

Looking through Obama's budget, I am reminded of those massive one-time-write-off festivals

...Take the Iraq war. We were not, under any administration, going to spend as much in 2015 as we did in 2005. But by treating that spending as an ongoing cost, Obama now gets to take as much credit for reducing it as he would for closing permanent air bases in Germany, or trimming Social Security. Reducing the cost of "overseas contingency operations" acounts for $1.5 trillion of Obama's much vaunted $2 trillion in savings. Likewise the AMT fix--with high-end incomes falling, deflation in the air, and homeownership rates declining, AMT collections are going to decline even without a fix; this lets them recognize the entire decline at a time when the numbers are so large that taxpayers are too dazed to notice the fall.

This is classic "straw man" technique. First, establish a Scary Scene which is fictional. Next, "defeat" the "scary scene" in real life. (You can do that while working out at the gym, for example. Since the scene doesn't exist, no actual effort is required.) Finally, declare "Victory!!" and seek re-election.

Same BS as Doyle's "$530Bn Deficit" mutterings. There WAS no $530Bn deficit--the number existed only because Doyle fabricated it.

Some people may actually buy what he's selling. Others will buy tea and throw it into the face of home-visiting (D) co-conspirators.