I recently had the pleasure of sitting with our esteemed board member, Chuck Chokel, to discuss the latest U.S. Treasury Report Chuck has bravely poured through this report for the past three years so we don't have to.
Aren't you glad some people think that's fun?
We recorded the conversation so you could watch it at your leisure, which we encourage you to do because there are some very revealing facts.
For instance, this yearly report is our government's most crucial accountability document. So why doesn't it garner any media attention?
And why is it released after the State of the Union Address?
Isn’t the financial state of the federal government an important part of the State of the Union?
Could it be complacency, complicity, or conspiracy?
In fact, the report's conclusion in the Executive Summary states we are on an unsustainable path. (I did not hear that in the State of the Union Address.)
"Conclusion: Projections in the Financial Report indicate that the government's debt-to-GDP ratio is projected to rise over the 75-year projection period and beyond if current policy is kept in place. The projections in this Financial Report show that current policy is not sustainable."
At minute marker 23:00, Chuck goes into more detail on this and how the present value of future costs less the present value of future income over the infinite horizon has gone up $23 trillion in two years.
Here are a few other points Chuck reveals from the report:
The government's net cost was $9.09 billion, up 23.8% from the previous year.
The budget deficit is $1.375 trillion, and for the 3rd consecutive year, the government has run a deficit of over $1 trillion. In this audited financial report the deficit, called net operating cost, was $4.171 trillion
Liabilities (bills) exceeded assets by $34.1 trillion. These liabilities only included a small fraction of the Social Security or Medicare liabilities. They leave more than $100 trillion of these liabilities out because they believe Congress can change the laws anytime. Therefore, no liability is recorded beyond the checks to be written in the near future.
Furthermore, at minute marker 9:39, Chuck addresses the long-term projections of the Treasury Department's report. The report shows a one-year estimated improvement of $18 trillion while listing "Other Mandatory Spending" with a decrease of $17.3 trillion. It took much digging into that report to determine what "Other Mandatory Spending" meant.
I'll let you listen to the recording to find the answer!
The government needs to get its fiscal house in order. We must demand that honest (full accrual) accounting be used for government's financial reports. The playing field needs to be leveled between government and private sector accounting for the purpose of transparency, accountability, fiscal responsibility, and to serve an informed electorate.
A bankrupt government serves no one!
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