The American Institute of CPAs has the article and video What’s at Stake? A CPA’s Insights into the Federal Government’s Finances.
||What’s at Stake? A CPA’s Insights into the Federal Government’s FinancesThe following resources are referenced in the What’s at Stake video and linked here for easy access:|
With all due respect to my daughter the accountant and my cousin the CPA, it is too bad that the AICPA does not realize the limits of its expertise.
First the “revenue” that the Federal Government takes in as taxes bears little relation to the “revenue” that a corporation takes in. (The Federal Government does not actually need any revenue from taxes to run the government. Our Federal Government creates the money that it uses to pay for its expenditures. Taking in taxes is just a policy decision that the government has made.)
Second, comparing future obligations that will be paid out over an infinite future is not comparable to obligations that have a fixed payment schedule or to yearly income or revenue. To put it mildly, it is an oversimplification to compare $51 trillion of obligations, such as Social Security, to the current net worth (not assets) of the citizens of the country. Perhaps some people would be shocked to actually count up how much money they will spend over their lifetimes to the amount of money they make in their best year.
Thirdly, to say that the Federal Government assets are only $2 trillion is beyond asinine.
Other than that I don’t have too many more complaints about this video.
This is not to say that sound accounting principles should not be applied when appropriate. Of course they should. In my uneducated view of accounting, I think that some accountants forget that accounting rules were invented to help run enterprises well. If the accounting rules make it difficult to run an enterprise well, then you have to think about what is wrong with applying the particular rule to the particular situation. Perhaps the accounting rule will make you realize something that you are not doing well in running the enterprise. On the other hand, it is possible that the accounting rule is not applicable to the current situation or is missing some essential element of the current situation.
Accounting rules are changed from time to time, when the arbiters of accounting such as the Federal Accounting Standards Board (FASB) deems it important to adapt the rules to changing circumstances or to different enterprises. In other words, there is nothing sacred about accounting rules.