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Stealth accounting and other funny money games............

catch22catch22
edited July 2011 in Off-Topic
Morn'in,

A quick note before the chores of the day must take place.

I enjoy a decent magic show as much as anyone; and especially the very best, where one is left scratching the head and wondering; "How was that done?"

Over the years, I have read various short stories about how accounting practices standards move and change. Some of theses changes, practices and uses; from my recall, may allow for "interesting" methods for which a company/business may account for expenses and related to "adjust" their tax burden(s). Accounting practices, I would presume attempt to have the most favorable intereptation of the language of a tax code relative to a particular business.
I am not even close to having an understanding of the "fuzzy math" associated in this area. We have performed our own tax filings since day one; with some periodic adjustments for small business functions as allowed by the tax codes; but we do not have a need for or deep understanding of the big time methods of accounting and tax code.

Obviously, at a family/personal level; one does perform a household accounting, as there is X amount of income with which to meet the various required and/or desired cash flows that leave the household budget.

The two links here offer some information as to the "real" world budgets most here at MFO must deal with and use; VERSUS some of the "magic" that does and has taken place over the years at government levels.

Enjoy the info chew...................

http://www.mlive.com/opinion/muskegon/index.ssf/2011/07/viewpoint_unfunded_liabilities.html

http://www.truthinaccounting.org/

Regards,

Catch

Comments

  • InvestorInvestor
    I think it is actually fuzzy math from sites like this to account all future obligations as due today and calculate dept ratios like that. The situation is bad but not as bad as these doomsayers like us to believe.

    This is a problem of cash flow. Is the government revenues will be sufficient to meet the obligations of the government now and the future? If not we need to raise revenue and reduce the spending. One party wants to do the former (raise revenue) and other party wants to do the latter (cut spending). In a normal environment saner minds meet in the middle. I am afraid we have more crazies in the congress than in recent times. This is what happens when you encourage sharp political polarization and drive moderates out in elections. On top of that we still have a nascent growth which can be easily squashed by trying to solve these problems in a short term horizon. When you try to solve them in short term (which took decades to come to this point), we will basically be cutting the branch on the tree we are sitting on. It will hurt fixed lower and middle income people and retires.

    I personally want something to be done on both sides of the equation and changes made gradually and over long term. We only need to start the process of moving to more fiscally responsible situation and index the adjustment based on economic recovery (faster recovery => faster cuts to debt)
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