The most interesting part of the report was in the conclusion from a section addressing what they call a “Fiscal Imbalance.” From page 156 of the report:
While we are unable to express an opinion on the U.S. government’s consolidated financial statements, the following key items deserve emphasis in order to put the information contained in the financial statements and the Management’s Discussion and Analysis section of the 2006 Financial Report of the United States Government into context. Despite improvement in both the fiscal year 2006 reported net operating cost and the cash-based budget deficit, the U.S. government’s total reported liabilities, net social insurance commitments, and other fiscal exposures continue to grow and now total approximately $50 trillion, representing approximately four times the Nation’s total output (GDP) in fiscal year 2006, up from about $20 trillion, or two times GDP in fiscal year 2000. As this long-term fiscal imbalance continues to grow, the retirement of the “baby boom” generation is closer to becoming a reality with the first wave of boomers eligible for early retirement under Social Security in 2008. Given these and other factors, it seems clear that the nation’s current fiscal path is unsustainable and that tough choices by the President and the Congress are necessary in order to address the nation’s large and growing long-term fiscal imbalance.
The US went from $20 trillion in debt in 2000 to $50 trillion in 2006. Not a Good Thing™. This report uses the same Generally Accepted Accounting Principles (GAAP) that the SEC requires all publicly traded companies to use. So it is far more accurate than the cash-basis reporting normally used which ignores long-term obligations that don’t have to be paid yet, such as Medicare and Social Security.
I found this article from WorldNetDaily to be helpful in summarizing the report, though I didn’t follow any of the links at the bottom.
UPDATE: There is another article by Dr. Chris Martenson on FinancialSense.com that covers this issue very well. He says he’s heavily invested in gold and silver, which should help in the event of massive inflation. It’s a good way to avoid losing your savings once the financial obligations we’re in, which are common in many Western nations by the way, start coming due and the government starts inflating its way out of debt.
My plans are a little unsure at the moment. I believe in the coming crisis (who couldn’t with the US Treasury itself announcing it) but don’t really want to start buying gold with the little cash I have. I do have several paper investments (like stocks and mutual funds) and am planning to switch to things that generate direct income, such as real estate and businesses. There is a good Wikipedia article on buying gold if that ever starts to look like a good choice.
(Written in April 2005, but never published)
At home, I am planning to set up a file server. The only other thing this machine will do is act as a printer server so my wife and I can share the printer without any cable swapping. If I could have gotten a new Mac mini, I would have done so. My wife and I have been impressed and very happy with her PowerBook, but my budget was “as little money as possible.” So I asked around for an old machine I could get for free, and then explored my options as to what OS to use.
Of course my budget eliminated any newer Windows from consideration, and I didn’t really want to use my old copy of Windows 95, so I settled very quickly on BSD or Linux.
I’ve used OpenBSD before and been very pleased with it. But Linux seems to have more momentum, so I put it in contention. But I didn’t want just any version of Linux. I use Suse Linux at work and have used Red Hat in the past. I’m not too impressed with either of them as far as a server goes. Being somewhat of a security and simplicity freak, I didn’t want to have anything installed except what I actually needed to share my printer and my files.
After a lot of reading, CRUX became my primary Linux candidate. OpenBSD, of course, is well know for it’s security. I recently read that the Honeynet Project, a group devoted to “learn[ing] the tools, tactics, and motives of the blackhat community”, has determined that the life expectancy of a default Linux install on the Internet is growing, and is often measured in months. Some versions of Windows are compromised in minutes. And OpenBSD? The headline from their homepage reads: “Only one remote hole in the default install, in more than 8 years.” They measure themselves in available security holes, whereas Linux and Windows are measured in security violations as the holes themselves are too numerous to count.
The kids really enjoyed Halloween this year. It was warm enough to trick-or-treat for quite a while and the older kids got to choose their own costumes. I had to laugh, however, whenever someone said to my 4 year old, “Oh, you’re a spaceman!” He would always correct them with just a touch of exasperation: “No, I’m an astronaut.”
I went to school with my 1st grade daughter today to share one of our Christmas traditions with her class. When I asked for volunteers to tell me what their favorite part of Christmas was, one boy raised his hand and said he was excited to ask his dad if he “can get my gun and stay up and see if I can shoot a reindeer.”
My younger son was playing with a neighbor boy on the trampoline in the snow and started crying. I went out to help him get up (the tramp was slippery because of the snow) and brought him inside. He kept complaining through his tears that the other boy had pushed him down and then added, “Just because I pushed him down and he thought…” I’m not sure what he was going to say after that, but my wife and I both laughed pretty hard.
Well, I guess this is the obligatory first post of a new blogger. This is a personal site and will probably end up covering a lot of diverse topics. Please feel free to contact me or comment on what I’ve written.
I’ll be changing the design of the site soon and hope to have a few articles up in the next few days. Thanks for visiting.