cash v accrual
there are two popular ways to keep your books: cash and accrual accounting methods. the accrual method is required for all businesses over a certain size. why? because it's so much easier to pull an enron with the cash method. criminals did. and shareholders laid down the law. the u.s. government uses the cash method. last year's deficit was some $400 billion by cash. or $1.3 trillion by accrual. the national debt is some $8 trillion by cash. or $45 trillion by accrual. the bulk of the difference is payments for future programs. like social security, welfare, medicare, medicaid, pensions, etc. the justification for using cash instead of accrual goes like this: congress could decide at any time to change those programs. in other words, to not pay. but really. can you imagine the fate of the congress that decides to stop paying welfare?