Accounting ignorance is obviously a bipartisan problem. From USA Today:
The federal government recorded a $1.3 trillion loss last year — far more than the official $248 billion deficit — when corporate-style accounting standards are used, a USA TODAY analysis shows.
The loss reflects a continued deterioration in the finances of Social Security and government retirement programs for civil servants and military personnel. The loss — equal to $11,434 per household — is more than Americans paid in income taxes in 2006.
"We're on an unsustainable path and doing a great disservice to future generations," says Chris Chocola, a former Republican member of Congress from Indiana and corporate chief executive who is pushing for more accurate federal accounting.
Modern accounting requires that corporations, state governments and local governments count expenses immediately when a transaction occurs, even if the payment will be made later.
The federal government does not follow the rule, so promises for Social Security and Medicare don't show up when the government reports its financial condition.
Bottom line: Taxpayers are now on the hook for a record $59.1 trillion in liabilities, a 2.3% increase from 2006. That amount is equal to $516,348 for every U.S. household. By comparison, U.S. households owe an average of $112,043 for mortgages, car loans, credit cards and all other debt combined.
I always maintained that the economic "boom" of the 1990's was an illusion, but the left wanted so badly to give Clinton credit for the economy. Well, there's no ignoring it anymore: it was an illusion, and despite the economic indicators today that were better than the 90's (interest rates, unemployment, tax rates, tax receipts, home ownership, etc.), the economic "good times" we see now are also an illusion.
Sometime, some day, the piper has to be paid. Then again, as alleged Republican Rob Simmons put it, our elected officials don't care because they'll be dead by then...to hell with the rest of us.
Labels: economic ignorance