Bala’s three basic accounting rules are: First, “there’s no such thing as a free lunch,” second, “figures can lie and liars can figure,” and lastly, “For every freeloader, there is an opposite sucker.”
Who is Bala? Bala Balachandran is from India, he is one of the foremost experts that many fortune 500 companies call on to help them out of a financial bind. I recently had the privilege of being instructed by Bala for several days and it was indeed an eye-opener to listen to his views of the economic condition of our country from the perspective of an accountant.
Why do I convey to you his somewhat humorous, yet enlightening basic rules? Very simple, these three rules are ever so true when we look at reported numbers by our government. As an example, let’s review our current National debt and the legacy we are leaving to our children to pay off.
If we believe the governments numbers that each American is responsible for $26,000 in National debt, while appearing high, on the surface it appears as a manageable number. However, remember, that ‘there is no free lunch’ and ‘figures can lie and liars can figure.’
You see, that number is based on the actual debt. It doesn’t take into consideration the following:
1) Social Security obligations for tens of millions of aging Americans. When we figure that Social Security will cost about $20,000 for each recipient per year or about $400,000 on average for each recipient over their lifetime; once we multiple that number by 40-50 million recipients, it is staggering beyond belief.
2) Medicare obligations for those above along with another 30-40 million or more. Been to the doctor lately? $20,000 – $30,000 in a given year for an aging recipient is a drop in the bucket. Once again, we can add up to $400,000 per recipient over their lifetimes for our children to pay for.
We could go on to discuss federal and private pensions and the various drug programs that will begin to drain society as well, but I think you get the point. All this doesn’t even figure in the time value of money that is diluted by inflation and so forth.
So at the end of the day, after the cold hard facts have seen the light of day, each household (family of four) in the United States may well have a true and actual debt load approaching $400,000 over their lifetime and that conservative figure continues to climb.
So now we have gone full circle, the honest in heart can figure out that ‘there is no free lunch.’ The same self-honest can see that ‘figures can lie and liars can figure.’ But lastly, those still holding on to the belief that we have been told the truth by our current Republican Politburo represent rule number three. ‘For every freeloader, there is an opposite sucker.”