So the mortgage on your house isn't one of the debits on your balance sheet?
The mortgage on my house IS a debt.
The fact that at some point I'm going to have to fix it up, is not a debt.
Future social security payments are far closer to the latter. The most important reason is that they are not a debt.
And the long term bonds issued by a corporation aren't part of its debt?
Not when the corporation owns the bonds. If ABC corp issues bonds to ABC corp, and pays x% interest to ABC corp, all of which goes to ABC corp, than perhaps some accounting rule requires it make an entry for the debt, but the entry is matched exactly by the asset. I don't know if that would be absolutely required, I'm not an accountant or a lawyer specializing in that area. But the balance is the same either way. You can report no debt, and no asset, or a debt and an asset that exactly equals it (and not just equals it, it IS it, the debt and the asset are the same thing). Either way you get zero. So the bonds in SS system, have a net value to the government of zero, and should count as zero (or net out to zero) on the balance sheet.
The future obligation to recipients isn't a debt. Its not even really an obligation, because congress could change it at any time, without violating any contract. Its more like a plan to spend. If a corporation planned to spend a lot of money on a new manufacturing plant, its stockholders would want to know this, but they wouldn't reasonably consider this future spending plan as debt. |
