Enterprise is a business or company or "a state-owned enterprise subject to the rule of business law." Institution, is a society or organization founded for a religious, educational, social, or similar purpose. "a certificate from a professional institution."
Which definition matches America for the everyday American business and enterprise? Is America similar to a church, fraternity or a school board with stakeholders. Or a corporation, partnership, Subchapter S corp or agency with shareholders or partners. Being a CPA my definition iAmerica is a giant enterprise consisting of a holding company in Washington, D.C. and subsidiaries in 50 State capitols, operating in sync with a consolidtion of global revenues deemed GDP, less global operating costs, as deemed by GAAP, generally accepted accounting principles.
The difference of which, is annual profits or loss. On the other hand the cash flow, for the consolidated Great American Enterprise, is the accrual basis budget that uses receipts of revenues less current expenditutes to track how much cash is left each accounting period to pay current debt obligations and accrue and put aside cash, for long term debt amortization. If the cash flow is negative, which it has been since World War II, the holding company and each of its subsidiaries must borrow the difference.
What has caused the negative cash flow over the last 75 years? Imbalance of trade primarily, unfunded great society programs for Social Security, Medicare, Medicaid, Obama care, entitlements for low wage earners, immigrants and unemployed. Taxation that is the major source of revenues after gobal trade, has been a political football between the capitalists and the soclialists, so to speak. Democrats are trickle up with higher taxation, for bigger is better government for intervention and control. While the Republicans are for trickle down lower taxation, for smaller government and more profitable businesses producing the higher taxable income and more tax revenues.
As for the reporting by media, whether its Fox New or CNN, their economic experts only scan the surfaceof the financial disaster of American governmental units. Since inception governmental accounting isn't for businesses or enterprises requiring financial management. Governmental accounting is using budgeting systems and results for its financial management. It's antiquated, inaccurate and misleading if you want to know the financial condition of the Federal government, State government, County Government, City Governent or a School Board. Budgets are typically used as estimates and commitments to spending levels and estimates of matching current tax collections with current expenditures.
The USA Big Government Swamp financial condition: On the basis of GAAP, generally accepted accounting principles, USA is insolvent, with negative net worth, negative net assets, negative cash flow. Currently USA is on budgetary accounting with the modified institutional cash basis that is cooking the books for the reporting its financial condition. For any other enterprise USA would be considered insolvent and a candidate for reorganization under Chapter 10 of the bankruptcy code. USA is borrowing money to meet payroll of 24 million government employees, with an unfunded pension liability of $7.3 trillion, unfunded government social security plan of $1.2 trillion, unfunded government health insurance plan $1.5 trillion and unsustainable fixed overhead of (difference between tax revenues and budget expenditures) of $6.1 trillion.
It looks like China also realizes the failure of governmental budget based accounting system, and plan to make the change to GAAP. This puts them ahead of us unless we reorganize our financial affairs. Maragret Thachter replaced British State institutions with enterprises for accountability.
