For years, the federal budget has been stated in cash terms, not the accrual accounting method, which Cooper said has been in use for five centuries and is now mandated for all private corporations. The difference, as he explained it, is this:
If you go to Target and buy an item for cash, it's felt in your wallet immediately. If you buy the same item on a credit card, unless you are using accrual accounting, it is disguised until the bill arrives.
The U.S. government has been running up bills -- notably the promises of pensions and health-care benefits for military veterans and millions of other retirees -- without putting the obligations on the books.
That is what is really scary about the financial report. It contains page after page of graphs showing the probable future course of income and expenditures for Social Security and Medicare. In each chart, the dotted line for spending climbs far faster than the solid line for revenue. Beginning a decade from now, the shortfalls explode in what Cooper calls "a perfect storm" of fiscal ruin.
Hi - is anyone else a little frightened? The Government is using shady accounting that will become evident ten years from now - when Dubya and his Amoklaeufer are out of office.
In the meantime, we're ruined.