Posted on 09/21/2018 7:49:09 AM PDT by SeekAndFind
In recently released numbers, the Treasury Department announced the government, after accounting for some scheduling quirks, ran a $152 billion deficit in August. The budget deficit was $107.7 billion in August 2017, 41-percent less than the newest data.
These numbers are startling, but the reality is that the nation’s debt load is actually much, much worse.
Washington uses an outdated, inaccurate accounting system that contributes greatly to America’s fiscal irresponsibility. The quality of financial reporting practiced by the U.S. would make Enron blush. The U.S. government is using accounting practices that I would not allow in a first-year business school class.
Washington’s cash-based accounting system records revenues when money is received and records expenses when they are paid.
This method produces a highly inaccurate budget number that doesn’t acknowledge bills that we know we must pay in the future like tax cuts, increases in benefits payable to federal employees or new obligations incurred due to promised Social Security, Medicare and Medicaid.
If the federal government was honest with the public and followed accrual accounting in its annual budget, which would recognize the increase in future obligations, there is little doubt that politicians would have found a way to deal with the looming financial crisis on our hands.
To put this another way, the Treasury bills owed by the U.S. — or the debt number often referred to in casual conversations — stands at around $20 trillion. But if you look at what the nation really owes, especially related to Social Security, Medicare and Medicaid, that liability number is pushed closer to $80 trillion.
No publicly traded firm would survive if it reported or acknowledged anything resembling a 300-percent increase in its public debt holdings.
(Excerpt) Read more at thehill.com ...
“Social Security, Medicare and Medicaid could be reduced or even canceled tomorrow with no legal repercussions. They are not contractual obligations.”
Not in the eyes of the US Treasury. Those items are hardwired as mandatory spending outlays and cannot be changed without an act of Congress signed into law by the President.
These unbacked currencies are a scam and are a driver of Big Governments, wars, and welfare worldwide.
The USD is the scam at the top of the heap. The USA scams the rest of the world with its fraud.
I keep waiting for faith in the USD to collapse, but since other global fiat currencies are even worse, confidence in the USD scam is maintained.
Entitlement promises are not made to be kept - they are made to win the next election.
Interesting Chart. I just went on Medicare.
It isn’t “free” as many people seem to think. You know, like the Rats do who are pushing Medicare for all (nice name change from Single Payer).
I pay a Monthly Fee of $134 which is taken out of my Social Security Check. Then I pay $160 a Month for my Supplemental Plan and another $20 for my Medicare Plan D Drug Plan.
My Supplemental Plan has a $135 Deductible and my Plan D Drug Plan does not pay all the costs of the three Prescription Drugs I take. One I can get at Walmart without even using the Plan D Benefit. Of the other two, only 40% of the Cost is covered.
In other words, Medicare costs me about what I was paying for Health Insurance Coverage back in 2013, $305 a Month not including the additional cost of the Drugs I take.
It is better than what Obamacare ended up costing me, about $1,000 Month for me and the same amount for my Wife, so I guess I can’t complain. LOL
In any event, I figure the total debt of the USA gov’t is now on the order of $250T to $300T. But what do any of us really know?
I seem to remember a time in the late-70s or early-80s when the great Arthur Anderson CPA firm did an independent estimate of the total debt of the USA Federal government. Once all the promises to pay were taken into account the conclusion was that the country was $100 trillion UNDER WATER.
And this stuff isn’t like rewards points, or unused gift cards where one can say - well, if the restaurant goes out of business the customer won’t get to eat for free.
My understanding is that the gov’t has made all sorts of promises to pay for stuff - interest on gov’t debt; contracts to build stuff; they agree to pay pensions to employees (current and retired); and they have accumulated HYOOOOJ liabilities in the form of guarantees to all kinds of groups. As for Social Security and Medicare and Medicaid - a promise to pay $100 billion dollars a year (for example) can be calculated to a net present value. This is similar to what happens when one borrows money to buy a car or house. Conversely if one wants to receive an annuity, there is a know way to calculate how much money must be paid NOW to support those future cash flows.
Some of the big differences with the gov’t are:
* They can “print money”, by raising tax rates; however, there might be a limit to what voters allow in this regard
* They may be able to change the laws regarding some of the unfunded liabilities
* Oh, and one more thing - they have more powerful means of enforcing their will than most of us would want to face.
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