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Politics

We're Doing Fine, As Long As You Ignore the Liabilities

Jacob Sullum | 2.8.2007 12:47 PM

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In a New York Times op-ed piece, Steven Rattner, managing principal of a New York investment firm, asks what the federal budget would look like if the government were bound by accounting rules similar to those followed by private businesses. The short answer: a hell of a lot worse than President Bush's projections of red ink fading to black within a few years. For one thing, the government would not be allowed to use the current Social Security surplus to cover the general fund's gap between revenue and spending, a constraint that would raise the 2006 deficit by $185 billion. Accounting for pension obligations to federal workers would add another $200 billion. But that's small change compared to the government's long-term Medicare and Social Security obligations, which total something like $39 trillion but are not included in the government's rosy picture of its own financial condition.

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Jacob Sullum is a senior editor at Reason. He is the author, most recently, of Beyond Control: Drug Prohibition, Gun Regulation, and the Search for Sensible Alternatives (Prometheus Books).

PoliticsPolicyGovernment SpendingSocial Security
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