I have a tendency to wear my mind on my sleeve
I have a history of losing my shirt
--Barenaked Ladies
While I'm jotting data, a couple of snippets from the GAO financial statements of United States for FY ending Sept 2010. All numbers below in $billions.
From the income statement (2010):
Consolidated revenue $2,217
Consolidated net cost $4,296
Net operating revenue (cost) ($2,080)
From the balance sheet (9/30/10)
Total assets $2,884
Total liabilities $16,357
They don't do this, but equity here is 2,884 - 16,357 = -$13,473. In the world of markets, negative equity = insolvency.
The GAO includes off-balance sheet actuarial estimates of the present value of the various entitlements (Social Security, Medicare, etc). Their 2010 estimate is $30,857 (a value that seems way too low).
Regardless, if we add these off balance sheet liabilities to the on balance sheet liabilities we get $47,214, which puts equity at -$44,330.
The operative words here are insolvency and leverage...
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1 comment:
Cash Flow – While recession depressed F2008-F2010 results, cash flow has been negative
for 9 consecutive years ($4.8 trillion, cumulative), with no end to losses in sight. Negative
cash flow implies that USA Inc. can't afford the services it is providing to 'customers,' many
of whom are people with few alternatives.
Balance Sheet – Net worth is negative and deteriorating.
Off-Balance Sheet Liabilities – at least $31 trillion (primarily
unfunded Medicare and Social Security obligations) amount to nearly $3 for every $1 of debt
on the books. Just as unfunded corporate pensions and other post-employment benefits
(OPEB) weigh on public corporations, unfunded entitlements, over time, may increase USA
Inc.’s cost of capital. And today’s off-balance sheet liabilities will be tomorrow’s on-balance sheet debt.
~Mary Meeker, USA, Inc., February 2011
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