Posted 6/02/2007 02:10:00 PM by Douglas

Federal accountants cook the books to hide the fact that the Fed is hemorrhaging money? Say it ain't so?!?

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.

Why should the government keep books like corporations keep books? I don't know of any corporation that is allowed to print more money when they run out. Ok, maybe MicroSoft. But $1.3 Trillion?!? I know there are other sources of government income besides personal income taxes, but how do you spend twice what you took in? Does the government spend money like a drunken sorority girl at Cancún for spring break with daddy's credit card? Sadly, yes. The solution:

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.

Ha! That's freakin' hilarious! Tell 50 Million senior citizens they're cutting Social Security or Medicade. Tell the 30 Million farmers their subsidies are going away. The government can't cancel those programs because the people responsible have to get re-elected. But there is one solid fix:

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.

Catch that? We can't even begin to look at how dire the overall situation is because Medicare's "problems overwhelm the analysis." So let's just ignore it. Maybe it'll just go away, just like the value of our fiat dollar.