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A loss of sanity...
April 13th 01:37:53 PM
In today's Washington Post, David Broder has an op-ed entitled "Red Ink Run Amok" about Congress' runaway spending. Now I know what you're thinking -- more of the same. Well, I have been working on the issue of Social Security for almost a year now, and I very rarely see an op-ed that hits home like this one. I just finished reading it and i'm all worked up.
Take this quote from the article:
Whereas the budget deficit for fiscal 2005 was officially given as $319 billion, "the government's accrual-based net operating cost . . . was $760 billion in 2005."
That $760 billion is the real difference between the money the government received and the obligations it added in the past year -- in other words, the unfunded costs being passed on to our children and grandchildren.
For years, the federal budget has been stated in cash terms, not the accrual accounting method, which Cooper said has been in use for five centuries and is now mandated for all private corporations. The difference, as he explained it, is this:
If you go to Target and buy an item for cash, it's felt in your wallet immediately. If you buy the same item on a credit card, unless you are using accrual accounting, it is disguised until the bill arrives.
The U.S. government has been running up bills -- notably the promises of pensions and health-care benefits for military veterans and millions of other retirees -- without putting the obligations on the books.
That is what is really scary about the financial report. It contains page after page of graphs showing the probable future course of income and expenditures for Social Security and Medicare. In each chart, the dotted line for spending climbs far faster than the solid line for revenue. Beginning a decade from now, the shortfalls explode in what Cooper calls "a perfect storm" of fiscal ruin.
Let me say this in a different way: Congress is stealing from future generations in order to pay for their out-of-control spending today...and then they are hiding it with creative accounting practices that are not even legal in the private sector.
Quoted in the article, David Walker of the GAO says, "amounts to $156,000 of debt for every man, woman and child in America. For a family, it's like having a $750,000 mortgage -- and no house."
What is a good example of this practice? The Social Security "Trust Fund". Because the IOU's in the "Trust Fund" are counted as assets instead of liabilities, Congress can spend all of the surplus and then pretend like it's still there! It is simply amazing that Congress can spend over $1 Trillion to date, because they have always used the cash accounting method, and still say with a straight face that they are protecting the Social Security "Trust Fund".
Something must be done.
Posted by Jeremy Tunnell
Comments
Wow a post I generally have no problems with.
Yes, something must be done but following a solution to the SS crisis put forth by the same congress and president that have greatly exacerbated the problem, namely SS Equity Funds, isn't that something.
The first step is for these druken sailors to stop spending so much f-ing money, particularly discretionary money. That's money that needs to go towards transitioning us off of SS and out of the evil system completely.
SS Equity Funds EQUAL Big Government Corruption!
S4 Sucks and Gives Change!
Posted by Noid on April 14th 11:01:34 PM
BTW, if you guys want to be productive for a change, why don't you dig through the budget numbers from the past 5 years or so and show with footnotes exactly how the government misuses the surplus and point to how in their own budgets. I think showing people this explicitly is helpful using charts backed up by the government's own data.
Posted by Noid on April 14th 11:10:54 PM
You might also look at how the government's understating of the CPI really screws seniors by allowing the government to pay far less in benefits than they would otherwise have to if they honestly reported inflation.
Social Security: Everybody gets screwed!
Posted by Noid on April 14th 11:16:54 PM
That's a big job, Noid. But maybe Nicola is feeling dangerous enough to tackle something like that.
Posted by jeremy on April 15th 10:56:09 AM
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