Enron swindled investors by hiding expenses until they couldn't anymore, then the company collapsed. What's going to happen when the U.S. government collapses?The cover letter in the report from Treasury Secretary John Snow contains the bad news. Whereas the budget deficit for fiscal 2005 was officially given as $319 billion, "the government's accrual-based net operating cost . . . was $760 billion in 2005."
The U.S. government has been running up bills -- notably the promises of pensions and health-care benefits for military veterans and millions of other retirees -- without putting the obligations on the books.
That is what is really scary about the financial report. It contains page after page of graphs showing the probable future course of income and expenditures for Social Security and Medicare. In each chart, the dotted line for spending climbs far faster than the solid line for revenue. Beginning a decade from now, the shortfalls explode in what Cooper calls "a perfect storm" of fiscal ruin.