8/5/9

Making big promises is one of the things governments do well, and cash accounting lets them disregard each year’s growth in the eventual cost of making good on those promises. In the case of the U.S. government, cash accounting allows the build-up in promised pensions for civil servants and military personnel, to cite one giant example, to simply be ignored. Overlooked. Passed over in silence. The build-up of future Social Security and Medicare liabilities is handled the same silent way. For the government, cash accounting isn’t just an accounting method, it’s a denial method.