The dirty secret in Uncle Sam’s Friday trash dump

Releasing information on the Friday before a big holiday is a time-tested way to bury bad news. So when the Government Accountability Office’s fiscal 2011 financial statements for the federal government were released on the Friday before Christmas, it made sense to read them closely.

Since 1997, the United States has been a rare example of a government willing to publish financial statements using accrual accounting, which counts the cost of promises made as well as cash paid out. And the GAO’s professionalism over the years has won it a reputation for impartiality and effectiveness.

That professionalism is evident in the GAO analysis of the net present value of the Social Security and Medicare promises Washington has made to Americans. “Net present value” means the total that would have to be set aside today to pay the costs of these programs in the future. The government puts these numbers in appendices, rather than in headlines. But the costs are real.

In fiscal 2011, the cost of the promises grew from $30.9 trillion to $33.8 trillion. To put that in context, consider that the total value of companies traded on U.S. stock markets is $13.1 trillion, based on the Wilshire 5000 index, and the value of the equity in U.S. taxpayers’ homes, according to Freddie Mac, is $6.2 trillion. Said another way, there is not enough wealth in America to meet those promises.

If the government followed corporate accounting rules, that $2.9 trillion increase would be added to the $1.3 trillion cash deficit for fiscal 2011 that has been widely reported. And a $4.2 trillion deficit is something that Americans need to know about.

The Treasury acknowledges the need to show an accrual-based deficit, but the only retirement accruals it includes in its “Citizen’s Guide” to the GAO numbers are for promises to direct government employees and veterans. Promises to the rest of Americans are excluded, even though they are multiples larger than the $10.2 trillion of government debt held by the public.

The latest GAO numbers are particularly interesting because of a change in accounting standards that requires the government to explain why the cost grew by $2.9 trillion. Fully $1.5 trillion of that reflects the aging of all 312 million Americans by one year. In the GAO report from fiscal 2001, the cost of promises was $17 trillion. The growth in the cost from $17 trillion to $33.8 trillion averages about $1.7 trillion per year. The GAO doesn’t specify numbers for the other nine years, but one suspects that aging has driven most of the growth in the cost of the promises.

The cost would have been a lot worse but for two assumptions that the GAO found questionable.

First, Medicare’s cost projections assume legally required decreases in reimbursement rates to doctors that Congress has ignored for years — the so-called doc fix. For these projections to be realized, Congress would have to abide by its own cost controls and allow an immediate 27 percent cut to doctors’ rates, which is very unlikely.

Second, the Medicare projections assume that the 2010 Affordable Care Act (ACA) will reduce health-care cost growth by 1.1 percent per year, despite doubts voiced by the GAO and a panel appointed by the Medicare board of trustees.

The panel and the GAO recommended including an alternate scenario in the year-end figures, in which the doc fix continues and the ACA cost reductions do not materialize. The result is a $12.4 trillion increase in the cost of the promises, to more than $46 trillion. Given Congress’s history with the doc fix, and the general paralysis in Washington, it’s hard to argue with the GAO’s lack of confidence in Congress’s ability to honor its own cost controls.

If the government were a company, its huge and growing off-balance-sheet liabilities would set off alarm bells. But investor confidence has not been lost — Treasurys can still be sold at very attractive yields.

Confidence has been shaken, though, among the American people. Congress’s approval ratings are at record lows. Anger is flaring across the political spectrum, reflecting a sense that something has broken in our country.

In such an environment, is it right to release critical financial information the Friday before Christmas? Is it acceptable that politicians are not required to describe the cost of the promises they have made?

In 1990, the government required that companies begin to account for the net present value of retirement promises, not just current-year cash flows. General Motors began complying in 1992; and it recorded a $33.1 billion (pretax) charge to reflect the value of its promises up to that point, which led to what was then the largest annual loss in U.S. corporate history. Seventeen years later, the “free until accounted for” promises were a major factor in GM’s bankruptcy.

The United States is stronger than General Motors. And the good news is that small changes in health-care cost trends have a large impact on the government’s long-term promises. Our system is fixable. But our politics are toxic, and each side is dug into an ideological trench. In such an environment, when hard choices need to be made about promises and taxes, why should information be buried in an appendix?

Americans deserve better. One way for Washington to start earning back our trust is by giving us all the information, even if it is unpleasant.

Short, Sweet and Sad..

Less than 10% of Obama's cabinet have ever held a job in the private sector. This means that less than 10% of the people deciding our financial future have never ran nor worked in a privately held company, thus equating to letting a magician treat you for cancer based on the fact he has made things disappear before. It is any wonder our economy is continuing to slip and they have Zero remedy for it.

It is sad to think that we need to take a hint from Europe and lower taxes on corporations like they have and then take a tip from china and not tax the investment and savings of its citizens like the US currently kicks us in the balls with. Top that off with the fact Iran is announcing 10 new Nuclear facilities and the Russians building arms plants with Venezuela and i can easily say this Joke is the worst president in history. IN less than 1 year he has taken what was once a feared super power and made us into a cocktail hour joke amongst world leaders. God be with us because the rest of the world is not.

Even Bill Clinton surrounded himself with private sector minds in regards to the economy and he was the darling of the left *continues to be* is it possible that this man is this stupid or is it something more sinister? Time will tell, but as of late i am beginning to think he truly has an agenda and a bone to pick with the United States and the way we came to power. This is only the Ramblings of an upset and Educated American so i may or may not be right.

I pray that i am not.

Last, but not least: The Afghanistan decision

SO after all the BS and the trumped up meetings and Decisions time he will do what the man HE PICKED to run the war asked for, now why take so much time? that is left to be divulged , but i am pretty sure one of my earlier theories *which i blogged about* is turning out to be true. He simply wanted to see the way the political winds would blow, that being said he is a traitor to the very men he is the Commander and Chief over.

To sit and watch them get hammered for months in order to gauge the political winds is treasonous at best and down right evil at its core. Although this is upsetting to me that he waited so long to make the same decision that could have been made from step one the real thorn in my shoe is the media! Where are the calls for Impeachment? The protest? The low down personal attacks on Obama? He is after all carrying on all of G.W. Bush's policies *Rightly so* He is using Bush's plan as it is the winning strategy and the left is not hammering him for it? Why not?

Is it that they are hypocrites and it is now proven that policy had nothing to do with their blood lust for Bush. They simply did not like the man or his party and played political games with American lives and well being for 8 years, Sad & Pathetic.

Their Darling Obama is doing all the same things bush did on the war front, and in fact adopted his play book! Yet i hear no cries from the left? He is escalating the war in the Af-Pak and has signed on for increased Drone assassinations *which i love* and still nothing from the left! Strange, Pathetic & Sad.

In the end me and G.W. Disagreed on many things, but he stood his ground and meant what he said and in life that is worth more to me then all the Photo ops and promises of change. Obama is nothing more than a snake oil salesman who the Uneducated youth bought into only to be let down, The journalist of the world have so much invested in him that to back off now would be to admit they were wrong and naive, which they will never do.

So here we go on Mr. Toads wild ride into the next three years. By the grace of god we will make it out the other side and will begin to rebuild our country with a strong economy and military to defend our interest at home and abroad. I hope we will find a leader who believes in the good of America and not one who only speaks of and apologizes for our faults.

P.s. His health care sham is unraveling as well as the global warming myth, Please let your representatives know how you feel and contact them with your thoughts. The cap & trade scam will only hurt American industry and the Health care bill will only continue to raise taxes on small business which employ over 80% of all Americans. Educate yourselves and get the facts that affect your life and that of your children.

God speed to the troops hitting hard around the globe and God Bless America

Journalsim is dead. A rant.

as you can see from the title i am in love with the media and journalist as a whole. By in love i mean i am sick and tired of them and their lies and lack of spine when reporting the facts of the days. They no longer report stories but tell them as they see fit. They only write about what fits there personal agendas and to those that follow them lock step.

The days of investigative reporting for the truth in a story are gone and now we are left with only the reporting of what they want us to think and feel. We no longer are given facts and then left to decide on our own, but force fed only half truths and the talking points that they are fed from the people they are covering.

Case in point, Is the N1H1 Flu; The flu kills 40K a year yet all of a sudden when single payer socialized healthcare is being pushed a flu is now an emergency and another reason the administrations must slam this down our throats. In national polls only about 20% of Americans want this style of healthcare yet those that now so much more than us in Washington are still trying to force it upon us..?? and the Reporters are lock step behind them pushing it as well without reporting the facts of how incredible out current system is compared to the rest of the world? Why is this? whys i this dishonesty being dumped on our heads like we are children and still being told Santa Clause brings the gifts and not the hard work of our parents?

Is there something wrong with working hard for nice things? Is it so bad that we have private insurance that we can afford if we like it by working hard? Funny thing is that the majority of those without healthcare are the ones who can afford it most. Studies show the highest numbers of uninsured are those making 75K or more a year!? A FUCKING YEAR.... Who turn down employer subsidized plans or outright don't want to pay for it for themselves? So now we are going to focrce people to have coverage? Uh is this america or some dictatorship? what happen to persoanl responsibility and choice of life path in america? it is what made us great..

The reporters will never admit this though because it does not meet their agenda of a utopia at any cost and no matter how badly it disrupts the lives of the 80% who happen to enjoy their current coverage.

Don't get me wrong it would be lovely if we could all live as one and enjoy everything for free and be FAT ASS LAZY PIGS.. The Socialized system worked out great for Russia?!?! Oh wait, No it didn't it failed and the country is bankrupt.. whoops.. But reporters wont say that! It doesn't fit their agenda. Grrrr, So back to the original thought.

Journalism is dead, it is no longer the checks and balances of the powers that be but only the PR wing for them to push agendas and sway public opinion. When the White House says a new agency is not news simply for Disagreeing you know the United States is in troubled times and that the Blood spilled by those who fought for the freedom was in vain. We live in scary times and those that do not see it are blinded by the celebrity of it all and do not deserve to live with such open freedoms(which we are all losing swiftly).

Anyone who thinks it is best to let others decide their health choices for them will gladly let another decide damn near everything and anything beyond that easily. These people are usually children and we grow out of it, but as of late we are seeing many who want nothing more than to continue at the Tit of their mommy and daddy so they never have to make a hard choice or do a days work to survive.. For those 20% i say give them all they can handle in freebies but leave the rest of us the fuck alone..

Any government powerful enough to provide everything for its people is powerful enough to take it all away.

We reap what we sew America... I didn't vote for the guy.. and those who did i hope you enjoy the dishes that are being served.

PS. GET THE HECK OFF THE GOLF COURSE AND THE CAMPAIGN TRAIL AND MAKE A EFFING DECISION ABOUT THE TROOPS. THEY ARE WAITING SIR, YOU ARE THE COMMANDER AND CHIEF. THIS IS YOUR PRESIDENCY NOW.. BUSH HAS NOT BEEN IN OFFICE FOR 9 MONTHS.. OWN IT SIR

Big Mistake Obama! (i'm glad you're making it)

Going after a news organization that holds the attention of more than half of the United States does not seem to be a fitting plan for one who wants to stay in power and control as badly as Obama and his people do.

http://voices.washingtonpost.com/postpartisan/2009/10/obamas_dumb_war_with_fox_news.html?hpid=opinionsbox1

http://www.realclearpolitics.com/articles/2009/10/20/obama_and_his_enemy_fetish_98787.html

No matter what you think of Fox News you cannot deny that they are the leaders in cable news. Be it ratings or all out ability to break a story first they have a hold of the market and are not soon to let go.

So here we are, 10 Months into a presidency and already they have decided to not combat the issues but to go after a news source!?! No NO, I get it.. I am as shocked and bewildered as you are! I would think it would be appropriate to marginalize something you do not like rather than thrust it full force into the media to be broadcast to the masses. Even those that hate fox are now tuning in to see what all the fuss is about and at this point in Obama's run the last thing he needs is anyone who agrees with him at all getting a different pint of view.

His own people are jumping ship and the youth voters who got him elected are now at a breaking point and there are rumblings of "why vote nothing changes" This being the case 2012 is way out of reach as Older more conservative types vote when angry and young voters just stay at home.

So with that i will leave you with this question Mr. Obama... What happened to transparency and the freedom of speech? you spoke so highly of both throughout the campaign and now that there are some that don't follow you lock step you cry foul? why is this so? is it you being scared about being found out as a fraud.. Or is it that your administration truly cannot debate the issues for you have no understanding of them? No matter what the answer you're bleeding voters . Perhaps this is the reason you throw parties at the white house with such frequency.. Maybe you know it is only yours for 4 years..