I hated accounting. So much of it seemed common sense to me. But there were a few aspects of the class that really resonated with me: like the concept of running a deficit.
I had taken a basic economics class previously, when I earned by Bachelor's degree. I was familiar with the idea of how the government ran a deficit, and how dangerous it was. The accounting class reiterated the problems of running a deficit, and how many businesses would try to hide the deficit with accounting tricks.
I knew - at the time - that the biggest company is the US that hides the true cost of their deficit is the US government.
I've tried explaining this to a lot of people. The hardest part to explain is how - in the years that we were running a 'surplus' - there was no surplus. The debt continued to go up. Yet, its been reported everywhere that there was a surplus and economists will tell you that our country ran a surplus.
But anyone who took economics or accounting knows this is a lie. You can't run a surplus and have your debt increase.
Anyway, when someone forwarded me this old article by USA Today, it was heartening to me. It explains what you need to know about the 'real' federal deficit. Keep in mind, this is from August of '04:
The set the government doesn't talk about is the audited financial statement produced by the government's accountants following standard accounting rules. It reports a more ominous financial picture: a $760 billion deficit for 2005. If Social Security and Medicare were included — as the board that sets accounting rules is considering — the federal deficit would have been $3.5 trillion.
The reason for this disparity is because the government doesn't include all of their liabilities on the books. The USA Today article explains it very well, and I don't want to impinge on their copyright... but I wish that everyone would read it.
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