What’s our real deficit
The last week of June was memorable because of the Supreme Court’s Obamacare verdict but another decision by the Governmental Accounting Standards Board (GASB) to completely rewrite the rules for pension accounting and reporting was ignored. Both will have a profound impact.
The GASB ruling requires net pension obligations be included as a liability on balance sheets. What that means is that a typical American household would have paid nearly all its income in taxes to balance the federal budget. Under the new rules, Congress’ red ink is equal to $42,000 per household, nearly 4X the official number reported. The U.S. Census household median income is $49,450.
The difference is that the Congress exempts itself from including the cost of promised retirement benefits. However, companies do include retirement commitments in financial statements but states and municipalities don’t.
According to the new rules, the deficit last year would be $5 trillion but Congress and the President say it was $1.3 trillion. What now must be added is the Social Security, Medicare and other retirement program liabilities which amount to $3.7 trillion.
With the new GASB groundrule it’s reported the Federal debt and retirement commitment equals $561,000 per household compared to the average household debt of $115,000 for mortgages, car loans and other debts. Yet the Senate and the President refuse to cut spending or pass a budget.
We need to get serious and hold the Congress and Obama accountable in November to reflect economic reality. Government needs to live within its means like every household is struggling to do.
South Burlington, Vermont
Saturday September 15: 2nd Constitution Day Celebration in St. Albans 11 a.m. – 1:00 p.m. at Taylor Park Rain site: National Guard Armory Contact Linda Kirker
Friday September 21: Charity Care Without Taxpayer Funds: Is It Possible? Alieta Eck, MD, describes how voluntary associations an provide large-scale medical care at NO taxpayer costs to Vermonters. Low cost No red tape Respectful 7:00 – 9:00 PM McCarthy Arts Center St. Michael’s College. Sponsored by the St. Michael’s College Conservative Club; the Green Mountain Patriots; Christian Medical and Dental Association, UVM Chapter; Vermont 912 Group, Vermonters for Economic Health; the Ethan Allen Institute. For more information contact: email@example.com