I don't expect the liberal caste to understand this.


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http://usatoday.printthis.clickability.com/pt/cpt?action=cpt&title=USATO
DAY.com&expire=&urlID=22498576&fb=Y&url=http%3A%2F%2Fwww.usatoday.com%2F
printedition%2Fnews%2F20070529%2F1a_lede29.art.htm&partnerID=1660

Rules 'hiding' trillions in debt
Liability $516,348 per U.S. household
By Dennis Cauchon
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.

Unfunded promises made for Medicare, Social Security and federal 
retirement programs account for 85% of taxpayer liabilities. State and 
local government retirement plans account for much of the rest.

This hidden debt is the amount taxpayers would have to pay immediately 
to cover government's financial obligations. Like a mortgage, it will 
cost more to repay the debt over time. Every U.S. household would have 
to pay about $31,000 a year to do so in 75 years.

The Financial Accounting Standards Advisory Board, which sets federal 
accounting standards, is considering requiring the government to adopt 
accounting rules similar to those for corporations. The change would 
move Social Security and Medicare onto the government's income statement 
and balance sheet, instead of keeping them separate.

The White House and the Congressional Budget Office oppose the change, 
arguing that the programs are not true liabilities because government 
can cancel or cut them.

Chad Stone, chief economist at the liberal Center on Budget and Policy 
Priorities, says it can be misleading to focus on the government's 
unfunded liabilities because Medicare's financial problems overwhelm the 
analysis.

"There is a shortfall in Medicare and Medicaid that is potentially 
explosive, but that is related to overall trends in health care 
spending," he says.



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