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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Steve Dietrich who wrote (495562)	7/16/2009 9:56:13 AM
From: i-node	Read Replies (1) \| Respond to of 1574127

You get your hypothetical $36 trillion number by extending Medicare's projected deficits into the future over an infinite time horizon. An infinite time horizon. That's idiotic in its own right. Actually, you're partially right -- those deficits are then discounted. The "infinite time horizon" is misleading -- it is the math that is used is based on an "infinite" time horizon, but in reality, you're simply saying that this is the funding that is required to make the program permanently solvent. Medicare is currently in surplus. Any debt has yet to happen. Only if you determine "surplus" on a cash basis. If Medicare were an insurance company, the $36T in debt would have to be reported on their balance sheet, and the $36T in accrued unfunded liability would have been reflected as a loss in their income statements over time. This is precisely the same as with the SS unfunded liability. It is a surplus only if you use the cash receipts and disbursements method of accounting, which is not a comprehensive basis of accounting is not allowed to be used for financial reporting generally (for example, the IRS will not allow a sizable corporation to report on this method because "it does not not clearly reflect income").