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Politics : A US National Health Care System? -- Ignore unavailable to you. Want to Upgrade?

To: i-node who wrote (17052)	4/19/2010 2:55:22 PM
From: TimF	Respond to of 42652

Congress could just declare SS to no longer exist, and that would be that. So, too, could they declare all public indebtedness to be null and void, yet, we still consider those as liabilities. The later would be a default on debt, the former would not. And the later might face problems in court since a court could consider the canceling of the debt to be a taking, or an illegal canceling of a contract, so congress and the president could cancel the debt and the courts could order them to pay it anyway. Its unlikely that the feds could really cancel the debt without court packing schemes or ignoring the court's orders and having a constitutional crisis. Such a decision would not be reasonable for future entitlement spending if it was canceled, and in fact USSC decisions have supported the point that there is no property rights for Social Security. But from a traditional accounting perspective, the fact that no direct claim exists should not, in any way, affect the accounting treatment -- so long as it is reasonable to anticipate the expenditure will be required and its amount is reasonably estimable (which this is). Its resonable to anticipate that we will spend money on defense and on farm price supports in the future. Should this also be treated the same as debt. I'm not saying entitlements are no different than defense. Entitlements don't have to be reauthorized each year, also entitlements are a larger category which has been growing much faster. But either way they are reasonably anticipated future spending. Since you where talking about corporations, lets use an example. If a semiconductor manufacturing company borrows money to buy a fab that's a debt and should be recorded as such. If it needs to replace or upgrade an aging fab soon, that's a reasonably anticipated expense, which is should make clear in its statements, but which doesn't belong on the same line as debt. Both should be accounted for, just not in the same place in the same way.