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|Subject: Re: Harry Reid is dangerously stupid.||Date: 10/3/2012 6:35 PM|
|Author: MadCapitalist||Number: 646801 of 722466|
Until very recently, Social Security was in surplus, with that surplus being "invested" into government bonds. Unfortunately, the way the accounting was done was to count SS payroll taxes towards general government revenues so that the SS surplus seemed to reduce the actual deficit the government was running. Which it really didn't.
This optical illusion/sleight of hand/accounting fraud allowed Reagan and Bush II to cut taxes and run deficits that were much larger than they appeared. Bush II, at the peak of the economic cycle, was running a deficit that was really around 700 billion dollars.
This is hilarious. You have it exactly backwards. It *should* have been included in the budget. It *should* have been consolidated. It's just like when a parent company owns a subsidiary. You consolidate the results. You don't carve out the subsidiary's results.
If you are *really* concerned about proper financial reporting, then push towards accrual accounting for government, not a basis of accounting that *increases* the accounting fiction even more.
By the way, those "investments" in bonds are bogus assets that are *exactly* offset by government liabilities, so it provides no economic benefit whatsoever.
I'm an experienced accountant, but if you want to argue accounting with me, go for it.
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