Run Like a Business
I had a friend recently comment on how he always wished the Federal Government ran more like a business. "That’s why I voted for Ross Perot both times," he said.
Umm, yeah…
Yesterday’s post at FinancialSense.com illuminated my friend’s wishes. It seems that the General Accounting Office in Washington slid a little note under the door of the White House. This 172 page report, entitled the Financial Report of the United Stated Government. The news is bleak. The chief comptroller of the GAO is back pedaling in a separate missive. Read Financial Sense’s take, it paints a great picture.
Despite improvement in both the fiscal year 2006 reported net operating cost and the cash-based budget deficit, the U.S. government’s total reported liabilities, net social insurance commitments, and other fiscal exposures continue to grow and now total approximately $50 trillion, representing approximately four times the Nation’s total output (GDP) in fiscal year 2006, up from about $20 trillion, or two times GDP in fiscal year 2000.
As this long-term fiscal imbalance continues to grow, the retirement of the “baby boom” generation is closer to becoming a reality with the first wave of boomers eligible for early retirement under Social Security in 2008.
Given these and other factors, it seems clear that the nation’s current fiscal path is unsustainable and that tough choices by the President and the Congress are necessary in order to address the nation’s large and growing long-term fiscal imbalance.
I guess the Government does run like a business. ENRON! But unlike any corporation, there is no Federal program waiting to bail out the affected parties. Most likely when we start bouncing checks to creditors like China, whole sections of America will be forfeit. Let’s all brush up on our Mandarin. Looks like we’ll need it.