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Politics : Ask Michael Burke

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To: Don Lloyd who wrote (107776)	5/29/2007 6:42:26 PM
From: Freedom Fighter	Read Replies (1) of 132070

Don, "If the imaginary Social Security Trust Fund experiences a 28% shortfall in 2042, that is NOT a current debt, and there is nothing that can or should be done to prefund it. Taxes can be increased in 2042, borrowing can be increased in 2042, the payouts can be cut in 2042, or the payouts can be partially made with newly printed money." I agree, but don't we want some sort of accounting done to measure the size and probability of something like that occurring in the future so we can make changes to the programs now that reduce both. I recall when they made companies like GM etc.. change their accounting for unfunded future health care liabilities (I think early/mid 90s or so). It pretty much wiped out many balance sheets and gave a better picture of the true earnings power of the companies. I used to get into heated debates with people about why those costs were eventually going to be a huge disaster for many companies even though the estimates were probably not very accurate and the cash flow statements looked pretty good at the time. I was a bit premature in my analysis, but I'm glad I had the accounting and avoided them all. ;-)

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