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Sunday, June 12, 2011

Federal Government engaged in “Bernie Madoff-style accounting” to hide mountains of debt it plans to dump on upcoming generations of Americans

The $61 Trillion Debt

(The New American) -- by Michael Tennant --

Anyone paying much attention to the news is aware that the U.S. government is now about $14.3 trillion in debt and considering borrowing even more. That $14.3 trillion, however, only includes what the government currently owes. If one includes Uncle Sam’s unfunded liabilities — promised future payments the government does not expect to have revenue to cover — Washington actually owes “a record $61.6 trillion,” according to a recent USA Today analysis.

That “amounts to $527,000 per household,” the newspaper says, which is “more than five times what Americans have borrowed for everything else — mortgages, car loans and other debt.”

The biggest sources of these massive unfunded liabilities are, of course, Medicare and Social Security. With 10,000 baby boomers a day turning 65, making them eligible for full benefits under both programs, it’s not hard to see why.

Medicare accounts for $24.8 trillion in unfunded liabilities, or $212,500 per household. This reflects an influx of 30 million beneficiaries over the next two decades, combined with rising healthcare costs and the prescription drug benefit enacted in 2006. Moreover, writes USA Today,
That $25 trillion is likely an underestimate, Medicare’s actuaries say, because it counts on 165 cost-saving changes in the health care reform law. Many of these are unlikely to occur — such as cutting physician payments 30% by 2012.
Social Security, meanwhile, makes up $21.4 trillion of the unfunded obligations, or $183,400 per household. This liability, the paper explains,
represents the difference between all taxes that will be paid and all benefits received over the lifetimes of everyone in the system now — workers and beneficiaries alike. This is the measure corporations and insurance companies use to assess financial adequacy of their retirement programs.
The government, naturally, does not apply the same standards to itself that it applies to private companies. It only counts taxes to be collected from workers over the next 75 years but not the benefits they will receive in subsequent years, thereby making the program’s long-term deficit seem much, much smaller than it actually is. Further, by counting the Treasury bonds in the mythical Social Security trust fund, the liability is made to appear even smaller. The feds would never let a private business get away with ignoring future financial commitments and claiming that money it owed itself — “like paying off a car loan with a credit card,” as USA Today puts it — was the same as actually possessing that cash. It is simply dishonest. “Bernie Madoff-style accounting,” Robert Wenzel of calls it...MORE...LINK

State-Capitalist pigs and their Big Government partners in crime feeding at the public trough plan to sell Generations X, Y, and Z into debt slavery to finance the evil existence to which they have become accustomed

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