« Total U.S. Unfunded Liabilities Reach $99 Trillion »
This article is a bit older, but it makes the point aggresively.
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Forget AIG for a moment. Forget Freddie and Fannie, Merrill Lynch, Bear Stearns, and Lehman Brothers. Imagine a company much bigger. Imagine a company that at the end of this year will have spent $400 billion more than it has taken in. Worse, imagine that the company's accounting is so bad, the $400 billion doesn't even begin to cover the whole of this company's liabilities.
In fact, the company deliberately chooses to use what's known as "cash accounting" rather than the more accurate accrual accounting. Cash accounting looks at how much cash the company has on hand, regardless of future liabilities. It's like saying if you have $75 dollars in your checking account right now, you're $75 in the black, never mind that you've deferred your car payment, quit your job, and have a rent check due at the end of the month.
The company also practices dirty accounting tricks like "forward funding," "advance funding," and "delayed obligations," deceptive tricks that hide its precipitous finances from auditors and its investors.
This company routinely borrows from its workers' pension plan to pay off its debt. Its accountants then claim that because the company owes the borrowed money to its own pensioners and not to outside creditors, the resulting hole in the pension plan doesn't really count as a liability. Sometimes, the company's executives neglect to pass a budget at all. When that happens, they keep the company running with "emergency expenditures," which its accountants don't consider real expenditures for records-keeping purposes, even though they're paid with real money.
By now, you've probably guessed where I'm headed. I'm not really talking about any private company. I'm talking about your federal government. If any private corporation employed the same accounting tricks Congress and the White House use to hide the government's massive debt and financial liabilities, its board and executive officers would all be in prison. In the government, it's common practice. And that's not even considering the funding of our two ongoing wars, which somehow emanates from outside the normal budget process.
If the government were required to abide by the same accounting standards as private industry, its debt would be in the trillions, not billions. Last May, Dallas Fed President Richard Fisher said that the government's unfunded liability for Social Security and Medicare alone comes to a staggering $99.2 trillion, or $330,000 for every man, woman, and child in the United States. It's an impossible figure.
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Jun 23, 2010 at 12:52 AM
Reader Comments (20)
Thank you and God bless America!!!!!
so you don't think we should put fannie/freddie liabilities on the books either...that's another unfunded liability that is not accounted for...and might reach a cool trillion...
and stop wasting your time hoping for an obama impeachment...nothing will happen while DEMS control Congress...they won't allow it...get a leadership change and you will see republicans starting to investigate these issues...
This is what you should post...and it answers many of your questions...
Is U.S. Now On Slippery Slope To Tyranny?
By THOMAS SOWELL
With vastly expanded powers of government available at the discretion of politicians and bureaucrats, private individuals and organizations can be forced into accepting the imposition of powers that were never granted to the government by the Constitution.
If you believe that the end justifies the means, then you don't believe in constitutional government.
http://www.investors.com/NewsAndAnalysis/Article/537967/201006211813/Is-US-Now-On-Slippery-Slope-To-Tyranny-.aspx
The United States IS a tyranny and has been at least since the 1960's.
And Barack Obama is a former professor of constitutional law. He obviously knows the constitutional basis of what he is doing in Arizona.
The Supreme Court has handed down just as many stupid and obviously unconstitutional rulings (sic) as the Congress and the President have committed unconstitutional acts. (The President has the right to declare war? Congressmen have the right to accept money from lobbyists?) It's obviously all in how they interpret the document and who has the power to carry out his/her interpretation.
The Dred Scott decision?
Corporations are persons?
Women don't have the right to vote?
Alcohol can't be sold or consumed in the United States?
Slavery is just fine.
Someone should right the definitive book about the worst decisions of the Supreme Court.
As for the 100 trillion dollars in obligations, inflation of about 15% per year would take care of that in about ten years.
During inflationary periods the nimble and intelligent always find ways to get rich, and the widows and orphans find ways to survive on 5 cents on the dollar as they always have.
Why worry?
Really, is that what you were told to believe...
Even Huffington Post doesn't make that claim...
http://www.huffingtonpost.com/2008/03/28/university-of-chicago-oba_n_93896.html
Hey James, try to find me one of Obama's great lectures. I would love to send a copy to Newt Gingrich.
By the way, I'm not a supporter of Obama even though I voted for him. He is almost as bad as W at this point and I would predict that he will be a one term president if I thought the Republicans could find a candidate under 70, not a right wing fringe case and not a born again Christian or Mormon. Do you know of anyone?
Obama thinks that the Constitution is a flawed document.
He says it reflects the fundamental flaw of this country...and it continues to this day.
So, wrong again, Dubya knew more about the Constitution.
You say...I'm not a supporter of Obama even though I voted for him. What a stupid thing to say.
James Street, sorry, you are hardly worth talking to let alone to answer your inane questions.
http://www.youtube.com/watch?v=LoPu1UIBkBc
Not that it is any way germane to the topic at hand...
Isn't is just a little eery to think that the people who comprise the laws, rules, policies and budgets of the US that is depicted in this article are going to pass "finance reform" and regulations on the banking and financial industries? What are the odds this works??
You say...I'm not a supporter of Obama even though I voted for him. What a stupid thing to say.
James Street, sorry, you are hardly worth talking to let alone to answer your inane questions.
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you aimed this at james street but it could have been meant for me or millions of others who feel the same...
i will explain it one more time and slowly...mccain was impossible to support once he added palin to the ticket...that is how millions felt at the time...and it cost mccain any chance at the election...so many voted for obama even though we didn't necessarily support him at the time or even less so now...
you're still in denial...have you seen sarah's polling numbers...the american people do NOT like her...but that doesn't fit with your world view so you ignore it...
I am to trust the polling numbers? Why? Is it because a bunch of libs decided to front-load some questions to their base to try to convince them that there is still hope and that the Dems are not up shit creek? Ask Scott Brown about polls. All your lib buddies were saying that Coakley was gaining on Brown towards the end of the campaign. Yes, that was wishful thinking too.
As for your asshole comment, I stepped in shit talking to James and I had to wipe my boot. I am sure he is a big boy, he was being a dick or just thick so I had to wake him up to reality. Anyway, Sarah Palin seems to be backing the winning candidates. Obama has turned into Bill Clinton, the kiss of death. Hey don’t tell me you read Washington Post too. Your left wing media is working hard to downplay her and the Tea Party for some very obvious reasons lately. I do think it sucks when her popularity is being compared to Obama’s as his is in freefall and hers is growing by the day. Ask Nikki Haley if she is in agreement with you on Palin.