Rewinding to previous State Of The Union Speeches

‎Before the State Of The Union Address, I thought it was relevant to look backwards at Barack's previous State Of The Union Addresses, at the statements made...

2009:

"Now is the time to jump-start job creation, re-start lending, and invest in areas like energy, health care, and education that will grow our economy, even as we make hard choices to bring our deficit down. That is what my economic agenda is designed to do, and that is what I'd like to talk to you about tonight."

2010:

"Now, if we had taken office in ordinary times, I would have liked nothing more than to start bringing down the deficit. But we took office amid a crisis. And our efforts to prevent a second depression have added another $1 trillion to our national debt. That, too, is a fact.
I'm absolutely convinced that was the right thing to do."

2011:

"We know what it takes to compete for the jobs and industries of our time. We need to out-innovate, out-educate, and out-build the rest of the world. (Applause.) We have to make America the best place on Earth to do business. We need to take responsibility for our deficit and reform our government. That’s how our people will prosper. That’s how we’ll win the future. (Applause.) And tonight, I’d like to talk about how we get there."

Our real liabilities; long term US debt

The biggest problem that we're going to encounter in the future is the money that the government has not allocated, for items they promised to pay for.

In a corporate environment, these are known as liabilities. Corporations have to use accrual accounting instead of cash accounting.

In cash accounting, its real easy to calculate your balance. You just indicate revenue - expenses.
So if you spent $50,000, but made $60,000, you would indicate $10,000 of profit.
Now here's where things get complicated.
Let's say that you owe $200,000 to someone who billed you for services to your business, but you didn't have to pay the bill for another 2 years.
In cash accounting, you still had $10,000 of profit. On paper, your business is making money.

Corporations can't use cash accounting for this reason. They have to indicate what their liabilities are on their balance sheet. Somewhere on their financial statement, they would have to indicate that they owe $200,000.

How does this relate to our government?
Our government does what no business would ever be allowed to do: they put off obligations (money owed), often sell bonds to cover these expenses, and then indicate a balance that doesn't reflect this debt.

If I've lost you, you can always read this USA Today report that puts it into perspective.

The $61.6 trillion in unfunded obligations amounts to $528,000 per household. That's more than five times what Americans have borrowed for everything else — mortgages, car loans and other debt. It reflects the challenge as the number of retirees soars over the next 20 years and seniors try to collect on those spending promises.

Most people are familiar with the fact that we are currently $14 trillion in debt as a country, or that we are now running deficits of over $1 Trillion a year. In this post, I explained how the current administration is now running a deficit averaging $1.7 Trillion a year. But most people aren't aware of how much we truly are in debt.

So as you listen to congress talk about cutting $10 billion, or even $50 billion from the budget, and as you hear congressmen protecting their pet projects, remember that figure: $61.6 Trillion.

Watch a drunken whore complain about the prostitute problem

Barack, telling us that "people should learn that lesson about me", that he's actually going to 'call the bluff' of people who want to reduce the deficit.

I want to play the president at Poker.