More on debunking the "govt is same as a firm!" or "govt is same as a household!" rote falsehoods.
Magpie's Asymmetric Warfare: On National Balance Sheets. https://t.co/LSqcxBQIdY— peterc (@heteconomist) December 21, 2016
From an accounting perspective, how this falsehood is remaining operative is through a lack of knowledge about the unique Basis of Accounting that is used exclusively by the Federal Government.
This Basis of Accounting is termed, Modified Accrual basis.
What is 'Modified Accrual Accounting'
Modified accrual accounting is an accounting method commonly used by government agencies that combines accrual-basis accounting with cash-basis accounting.
Modified accrual accounting recognizes revenues when they become available and measurable and, with a few exceptions, recognizes expenditures when liabilities are incurred.
So what this means is that the federal govt reports the right column using Accrual Basis while at the same time, uses Cash Basis in the left column.
The federal government institution is the only institution that does this.
So if you are the typical unqualified moron going all around out there all around the place dispensing rote falsehoods, you don't understand this.
The morons use the typical non-govt Accrual Basis standards in their evaluation of the govt position and will look at the right column (accrued) as overwhelming the left column (cash) and think "the govt is bankrupt!" and start going all around the place repeating this false phrase attempting to edify fellow citizens via rote methodology.
When the truth is they are stupid which you can learn via active learning methodology via the accounting science.