Chart of the day: social security and medicare

| 24 June 2008 15:25

Ross Perot is making a comeback! The Texas billionaire has come back into the political fray with his website Perot Charts. I recommend taking a stroll through it. You will definitely be a wiser person for it. Today’s chart comes from his site and shows projected Social Security and Medicare spending cash surplus vs. deficits.

Note, in the private sector, according to U.S. GAAP accounting rules, these deficits could never exist because the pension plan would have to be ‘topped up’ in order to meet pension solvency requirements over the projected service period (lifetime) of the beneficiaries. The projected pension liability at Ford and GM is one of the main reason those automakers are suffering financially.

A fundamental objective of this Statement is to recognize the compensation cost of an employee’s pension benefits (including prior service cost) over that employee’s approximate service period.
-FASB 87

The Federal Government doesn’t have this problem because it can do anything it wants.


This post is part of my series.

avatar About Edward Harrison

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages, a skill he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

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