is something the government does every year, similar to how large
companies like Apple, or Warren Buffett’s Berkshire
publish their own annual reports.
Berkshire and Apple, though, whose financial reports typically show
strong, positive results, the US government’s financial statements
are a complete horror show.
at the beginning of the report,the
government explains that it’s “net loss” for the year was an
unbelievable $1.2 TRILLION.
that number again.
trillion. That’s simply staggering.
larger than the size of the entire Australian economy… and
constitutes a loss of more than $2.2 million per minute.
is not a conspiracy theory or irrational fantasy.
is the Treasury Secretary of the United States of America publicly
announcing that the federal government lost $1.2
page ‘i’ of its annual financial report.
even more alarming is that 2017 was a great year.
was no war. No recession. No epic financial crisis.
his introductory letter, in fact, the Treasury Secretary proudly
stated that “[t]he
country enjoyed a pick-up in [economic] growth in 2017. Unemployment
is at its lowest level since February 2001, consumer and business
confidence are at two-decade highs, and inflation is low and stable.”
short, everything was awesome in 2017.
the government’s overall revenue was a record high $3.3 trillion
for the year.
despite all that good news… despite all those positive developments
and record revenue… they STILL managed to lose $1.2 trillion.
the government loses $1.2 trillion in a GOOD year, how much do you
think they’ll lose in a BAD year? How much will they lose when they
actually do have a recession to fight? Or another war. Or a major
importantly, how long can something so unsustainable possibly last?
the fun doesn’t stop here.
in the report, the government reviews its own assets and liabilities…
effectively calculating its “net worth”.
just like how an individual might calculate his/her own net worth–
you add up the value of your assets, like your home, car, and bank
account balances. Then subtract liabilities like mortgage and credit
end result is your net worth. And hopefully it’s positive.
government’s is hopelessly negative: MINUS $20.4 trillion. (See
page 55 of the report.)
that’s worse than its result from the previous year’s MINUS $19.3
trillion– meaning that the government’s net worth decreased by
about 6% year over year.
be clear, a net worth of negative $20.4 trillion means that the
government added up the values of ALL of its assets. Every tank.
Every aircraft carrier. Every acre of land. Every penny in the bank.
then subtracted its enormous liabilities, like the national debt.
difference is negative $20.4 trillion, i.e.
the government has far MORE liabilities than it has assets.
the government were a business, it would have gone bankrupt long,
top of that, though, the government separately calculated its
long-term liabilities from Social Security and Medicare.