by D. Cupples | Buying a new car would have long-term impacts on most Americans' household finances. Similarly, spending $200 billion on international programs or wars has long-term impacts on our nation's finances. Many Americans grasp this simple principle, and federal government officials should be among them. A recent Government Accountability Office (GAO) report states:
"The federal government's financial condition and fiscal outlook have deteriorated dramatically since 2000."
Why? Largely because the officials in charge of budgeting over the last six-plus years haven't truly considered future consequences of national spending. The GAO states:
"The federal budget has gone from surplus to deficit and the nation's major reported long-term fiscal exposures--a wide range of programs, responsibilities, and activities that either explicitly or implicitly commit the government to future spending--have more than doubled.
"Current budget processes and measurements do not fully recognize these fiscal exposures until payments are made. Increased information and better incentives to address the long-term consequences of today's policy decisions can help put our nation on a more sound fiscal footing.
"Given its interest in accurate and timely information on the U.S. fiscal condition, the Senate Committee on the Budget asked us to update our study of other nations' experiences with accrual budgeting and look at other ways countries have increased attention to their long-term fiscal challenges." (GAO report summary)
The full GAO report (47 pages) is available here.
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