How Government Accounting Rules Make a Trillion-Dollar Deficit Look Small

The Fiscal Policy Podcast with Fexingo: Government Budgets, Stimulus, and Public Spending · Jul 16, 2026 · 7m · transcript

The federal budget deficit is officially projected at roughly $1.5 trillion for fiscal year 2026, but that number relies on accounting conventions that exclude major categories of spending. Lucas and Luna drill into one specific gimmick: the treatment of federal student loans, where the government books a profit on new loans even though most experts expect significant losses. They walk through how the Credit Reform Act of 1990 created this distortion, why the Congressional Budget Office and the Treasury Department report different numbers, and what the true deficit might look like if the…