Glenn Beck asks why politicians aren’t doing anything about this? I wanna know why more citizens aren’t worried about this? And why they still think we need more government programs.
Somebody help me out here…
53 Trillion Dollar Asteroid
March 27, 2008 · 2 Comments
Categories: Uncategorized
Tagged: economy, government spending, medicare, social security
2 responses so far ↓
Youssa Djabita // March 27, 2008 at 7:51 pm
Slow day at work?
y // March 28, 2008 at 1:43 am
Justin, I’m surprised you don’t know the answer (though I think you might, but just wanted to make a point). Congressmen are elected every two years, presidents every 4, and senators every 6. He said that current estimates put the insolvency of medicare will happen in 2019. That is in 11 years.
Now, let me make an analogy. Everyone understands deep down that our planet has limited space. When I throw away my trash, it goes to a landfill. Eventually, if we keep doing that and don’t make any changes (such as burning the trash or hurtling it into space), the world will fill up with trash. Now, most of us don’t spend a lot of time worrying about this because it won’t happen in our lifetime. Or in the lifetime of anyone that we could reasonably care about. My point is that as humans we tend to only care about problems that might affect us or those we care about.
Politicians consider their political lives in much the same way. 11 years is multiple politicals lives for all politicians. If you are in congress and you say we need to raise taxes considerably or cut medicare obligations to people who continue to pay into it all for a problem that won’t really cause any problems for 11 more years, do you think you will really be able to keep your seat against someone who’s not so pessimistic?
American’s are procrastinators. Smart productive people in America realize that the only way they can be sure that they will accomplish something is to make it so they will be forced to care about it. Think alarm clocks and Outlook reminders at work.
The coming fiscal crisis in this country isn’t getting solved because there is no incentive for anyone to care. Full disclosure, I am a CPA. I am a financial auditor for a large firm, and it is my job to make sure that large corporations are appropriately reporting their financial positions. US accounting rules for businesses require businesses to record liabilities on their balance sheets for debts that won’t come due for years and years and years. The government has a different set of accounting rules. Business rules are made by a group called FASB. Government rules are made by a group called GASB. All accountants think GASB rules are bullshit, because they are. Government rules have been made to help governments hide debts because it is easier politically to have it like this.
It is the GASB rules that allow the government to not record the future medicare obligations as a liability. If our government were forced to abide by business accounting rules, it would be so highly leveraged that no one would lend it money, not even the Chinese.
But don’t take my word for it. Listen to the former Comptroller General of the government who just recently quit his post several years before his term was up. His job is to be the chief financial officer of the country, and he has been breathlessly telling anyone who would listen that our country is broke. No one would listen to him though. So he quit and joined a non-profit dedicated to solving the fiscal problems of this country’s government. go figure.
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