HOUSE_OVERSIGHT_020857.jpg
2.03 MB
Extraction Summary
4
People
9
Organizations
0
Locations
0
Events
2
Relationships
3
Quotes
Document Information
Type:
Presentation slides / financial analysis report
File Size:
2.03 MB
Summary
Two slides from a KPCB presentation titled 'USA Inc. | High Level Thoughts' (pages 31 and 32). The document critiques US Government accounting and budgeting practices, specifically noting the failure to count future entitlement payments (Social Security/Medicare) as liabilities and the lack of distinction between capital and operating budgets. The document bears a 'HOUSE_OVERSIGHT' Bates stamp.
People (4)
| Name | Role | Context |
|---|---|---|
| Greg Jonas | Source |
Cited as the source for the accounting analysis, affiliated with Morgan Stanley Research.
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| Laurence J. Kotlikoff | Author |
Co-author of cited paper 'Generational Accounting'.
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| Alan J. Auerbach | Author |
Co-author of cited paper 'Generational Accounting'.
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| Jagadeesh Gokhale | Author |
Co-author of cited paper 'Generational Accounting'.
|
Organizations (9)
| Name | Type | Context |
|---|---|---|
| KPCB |
Kleiner Perkins Caufield & Byers; organization branding on the slides.
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| Morgan Stanley Research |
Source of the analysis data.
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|
| USA Inc. |
Title of the presentation/report.
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| Social Security |
Mentioned regarding entitlement payments and trust funds.
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| Medicare |
Mentioned regarding entitlement payments and trust funds.
|
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| The Journal of Economic Perspectives |
Publication source for the cited 1994 paper.
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| US Government |
Subject of the accounting analysis.
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| Congress |
Mentioned in the context of budget scoring rules.
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| House Oversight Committee |
Implied by the Bates stamp 'HOUSE_OVERSIGHT'.
|
Relationships (2)
Slide states 'Source: Greg Jonas, Morgan Stanley Research' on a KPCB branded slide.
Listed together as authors of 'Generational Accounting'.
Key Quotes (3)
"Government accounting standards do not report the present value of future entitlement payments (such as Social Security or Medicare) as liabilities."Source
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Quote #1
"Our analysis takes a different view: governments create liabilities when they enact entitlements and do not provide for revenues adequate to fund them."Source
HOUSE_OVERSIGHT_020857.jpg
Quote #2
"Budget 'scoring' rules give Congress incentives to hide the true costs...and help Congressional committees defend their turf."Source
HOUSE_OVERSIGHT_020857.jpg
Quote #3
Full Extracted Text
Complete text extracted from the document (2,235 characters)
A Word of Warning About Comparing Corporate & Government Accounting...
• Government accounting standards do not report the present value of future entitlement payments (such as Social Security or Medicare) as liabilities. Instead, entitlement payments are recognized only when they are paid.
• Our analysis takes a different view: governments create liabilities when they enact entitlements and do not provide for revenues adequate to fund them.
• We measure the entitlement liability as the present value of estimated entitlement payments in excess of expected revenues for citizens of working age based on Social Security and Medicare Trust Funds’ actuarial analysis.
• Government accounting standards also do not recognize the value of internally-generated intangible assets (such as the sovereign power to tax). We do not recognize those assets either, as we have no basis to measure them. But the US government has substantial intangible assets that should provide future economic benefits.
Note: For more discussion on alternatives to corporate and official government accounting methods, see Laurence J. Kotlikoff, Alan J. Auerbach, and Jagadeesh Gokhale, "Generational Accounting: A Meaningful Way to Assess Generational Policy," published on 12/94 in The Journal of Economic Perspectives.
Source: Greg Jonas, Morgan Stanley Research.
KP
CB www.kpcb.com
USA Inc. | High Level Thoughts 31
Source: Greg Jonas, Morgan Stanley Research.
KP
CB www.kpcb.com
USA Inc. | High Level Thoughts 31
...and About Government Budgeting
• Federal government budgeting follows arcane practices that are very different from corporate budgeting – and can neglect solutions to structural problems in favor of short-term expediency.
• Federal government does not distinguish capital budget (for long-term investment) from operating budget (for day-to-day operations). As a result, when funding is limited, government may choose to reduce investments for the future to preserve resources for day-to-day operations.
• Budget “scoring” rules give Congress incentives to hide the true costs...and help Congressional committees defend their turf.*
Note: *For more detail, refer to slide 116 on congressional budget scoring rules related to recent Healthcare reform.
KP
CB www.kpcb.com
USA Inc. | High Level Thoughts 32
KP
CB www.kpcb.com
USA Inc. | High Level Thoughts 32
HOUSE_OVERSIGHT_020857
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