Treasury Publishes 2012 Financial Statement of the United States Government
Based on generally-accepted-accounting principles—or GAAP-based accounting—the 2012 consolidated financial statements of the United States Government showed a $6.9 trillion deficit for fiscal 2012, up from $4.6 trillion in 2011. The latest detail showed the uncontainable and uncontrollable actual federal budget deficit to be deteriorating rapidly. The much-delayed GAAP-based statements were published by the U.S. Treasury, today, January 17th.
Those deficit numbers reflect consistent GAAP accounting on current fiscal operations, plus year-to-year deterioration in the net present value (NPV) of unfunded liabilities for programs such as Social Security and Medicare. Reflecting the time value of money, the NPV represents the amount of cash in-hand needed to cover future obligations. Based on tentative calculations from numbers in the report, total U.S. government obligations—including the NPV of the unfunded-liabilities of social programs—is around $88 trillion, or nearly six-times annual U.S. GDP.
Even so, significant accounting problems with the statements continue, including “material” issues raised by the auditor, the Government Accountability Office (GAO). As a result, the GAO does not offer an opinion on the statements. With fully-proper accounting, the actual 2012 deficit likely topped $7 trillion, with the 2011 deficit topping $5 trillion.
Is there any other entity that could publish its accelerating insolvency, with “material” issues raised by its accountants, and continue operations while failing to address its financial predicament? What does this say about the integrity of conduct, promises and commitments made?