The Federal Government and Enron Accounting

I've blogged stories before about the questionable accounting used to tally the US federal budget deficit. A USA Today story is suggesting that even those more realistic assessments of the deficit (usually in the neighborhood of $700b) are far too low. They reached a similar number ($760b) just by applying some basic business accounting rules. But that assessment still does not account for social security and medicare liabilities. Standard corporate accounting practices require such liabilities to reported at the time they are incurred rather than when they come due. Using that system our annual budget deficits run around $3.5 trillion! By these measure the US should have reported $40t in losses over the past 9 years. The first step to solving a spending addiction is to admit you have a problem...