For years the Bush Administration has urged Congress to step up and deal with the unsustainable entitlement situation in Washington while the left continued to say all was fine. The right (or what passes for that ideology in Congress) also played footsie with this issue and ignored it during their term as well.
But you can only run so far from the numbers before they will force Congress to act. Sadly, those actions usually cause more damage as Congress simply doesn’t understand true accounting or economics. How can you politicize such a ludicrous financial situation? I don’t pretend to know that answer, but there will be one played out shortly. From USAToday:
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.
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.
