USA Today has this jarring analysis of the federal deficit:
The typical American household would have paid nearly all of its income in taxes last year to balance the budget if the government used standard accounting rules to compute the deficit, a USA TODAY analysis finds.
Congress exempts itself from including the cost of promised retirement benefits.
Under those accounting practices, the government ran red ink last year equal to $42,054 per household — nearly four times the official number reported under unique rules set by Congress.
A U.S. household’s median income is $49,445, the Census reports.
The big difference between the official deficit and standard accounting: Congress exempts itself from including the cost of promised retirement benefits. Yet companies, states and local governments must include retirement commitments in financial statements, as required by federal law and private boards that set accounting rules.
The deficit was $5 trillion last year under those rules. The official number was $1.3 trillion. Liabilities for Social Security, Medicare and other retirement programs rose by $3.7 trillion in 2011, according to government actuaries, but the amount was not registered on the government’s books.
That’s scary stuff, and that just counts this year’s deficit – it doesn’t even factor in the entire budget. But perhaps even more scary is the justification put forth for why the government’s accounting should be done differently than a private business’.
Jim Horney, a former Senate budget staff expert now at the liberal Center on Budget and Policy Priorities, says retirement programs should not count as part of the deficit because, unlike a business, Congress can change what it owes by cutting benefits or lifting taxes.
“It’s not easy, but it can be done. Retirement programs are not legal obligations,” he says.
Read that last line again. That’s right, you have no legal obligation to the Social Security and Medicare programs that you devoted more than 1/8 of your life working to pay into (total tax burden for these programs is almost 14% of income). Forget what you are being promised, you are completely at the whim of politicians as to how much, if any, benefits you will receive. So not only are we compelled by force to finance these programs, but they are completely bankrupt and we have no legal recourse if we never see a dime from them.
And these programs are what progressives hail as among the greatest achievements in American history.
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