HAHAHAHAHAHAHAHAHAHAHAHA
THESE GUYS SHOULD ALREADY BE IN JAIL
CROOKING THE BOOKS: GOVERNMENT STYLE
By: Ed Henry
Friday, June 12, 2002, the Associated Press published an article by Alan Fram that contained the following:
"The government will run a $165 billion deficit this year, the first red ink in four years, but surpluses should return by 2005, the Bush administration said Friday.
The budget's sudden plunge from last year's $127 billion surplus was no surprise. Analysts have predicted it because of the flagging economy, the financial market's swoon, and the costs of both last year's tax cuts and the government's response to the Sept. 11 terrorist attacks."
Now, let's look at last year's double bookkeeping. This is reported by the U.S. Treasury as "on budget" and "off budget" receipts and expenditures. The Associated Press does not provide these.
Gee, look at that red ink. I thought there hadn't been any red ink for the last four years. Yet, there it is, plain as day. And it's right there in the only category where the con artists talk about deficits, including the $165 billion deficit we may have this year. They don't count "off budget" as a deficit here.
The government defines a deficit as what occurs when spending exceeds tax receipts, when more money is spent than the government has taken in.
The result of a deficit is that the government must borrow. They never cut back on expenditures or what was finally decided in the budget, they simply borrow enough to make ends meet.
If they defined deficits as sums borrowed, we would have an entirely different story. The money "borrowed" from Social Security and other entitlements would be included properly as part of the deficit. But alas, that would be too honest.
The national debt covers borrowing and it is directly related to the same "on" and "off" budget sets of books. Here are the changes in the national debt for the same time period, fiscal 2001:
Here the $160.7 billion appears as a deficit with interest added. The same $160.7 billion that we just saw in the first budget table is part of the $199.3 billion under entitlement debt. Part of it went towards the "on budget" deficit of $33.5 billion. Then annual interest against last year's trust balances were paid, bringing this Entitlement Debt up to almost $200 billion. Interest that doesn't involve any money at all because it's paid by simply handing the entitlement trusts more junk bonds. Excuse me, these bonds are called "special obligation nonmarketable Treasury securities," invented specifically for this category and serving no other purpose.
No one has mentioned the fact that we paid down the Investor side of the debt by $66 billion in fiscal 2001. Here's what I think happened.
Any money on hand at the close of the fiscal year will automatically go against outstanding obligations, the national debt. The government probably had $100 billion in entitlement money set aside for this purpose. When 9/11 happened, $33.5 billion went to New York City, airlines that closed, families of victims, and emergency spending. It caused the deficit where we might otherwise have broken even and it left $66 billion for debt reduction.
We don't know where we're going to end up on Monday, September 30, 2002, when the government's fiscal year is officially brought to a close. With three months to go, we could deal in estimates, but let's see what the national debt indicates as of the close of June, 2002. Bush has returned to borrowing heavily from Investors, which is what hasn't happened in four years.
How can that be, you say? If all other figures are in the red, you can't possibly end up with a positive surplus.
Oh yes, you can. If you keep books the way the government does. On the national debt's set of books the entitlement surplus appears as a debt. But on the other set of books dealing with the budget, the same amount would appear as an asset, just like last year.
If this were the end of the year, the final budget table would look like this:
This all comes from the scam where the government fraudulently tries to convince you that they can both spend and save the same money.
If you consider figures that are part of the national debt as debt in one place and assets in another, then you're doing the same thing that Enron and WorldCom did. You're not only hiding debt, you're considering it an asset.
What else do you think it means when politicians tell you that the Social Security Trust Fund will carry the supplemental retirement system through the year 2041 and every economist tells you that if Social Security must ever turn to its trust fund the poor dears in Washington will be faced with the "tough decision" to either (1) raise taxes (2) borrow enormous amounts in the public's name (3) cut benefits or any combination thereof? These are the same choices government has whether there's a trust fund or not. They are the government's normal means of raising revenue and handling money. In other words, the trust fund is a joke, a scam.
A very expensive scam that piles up debt only you, your children, or your grandchildren must pay back some day. The con artists pretend that they owe this money to themselves, or one department owes another, but that's all bull. An excuse from the robber barons. There is no way to pay off any part of the national debt except with taxpayer money. When that happens, it's the public that is buying back its own money, plus interest.
When the federal government steals your retirement, health care, and other entitlement money (you can't really call it "borrowing") they spend it, all of it. They usually spend it as fast as it comes in and exactly where they intended to spend it in the annual budget they prepared and argued about. Despite the propaganda you hear about occasional raids, or one party being more guilty than the other, it's spent, sometimes even to pay off part of the national debt. It's a nonpartisan rip-off and your balance is nothing, zero, zip, zilch, nada, squat, the big goose egg. You will never see that money again. It was the black ink that they spent.
Then, they immediately deposit "special obligation" nonmarketable bonds (junk bonds) in the respective entitlement trust fund that really isn't a trust because it never holds anything but debt. Since any part of the national debt can be redeemed only with taxpayer money, these debit black holes represent nothing but double taxation, with interest added. It's a money crime of the highest order.
Where do you think accountants from Arthur Andersen and various publicly held corporations learned this trick? If the lawmakers can engage in this sort of creative accounting and get away with it, why shouldn't the private sector? These bean counters all go to the same schools, read the same professional periodicals, belong to the same clubs, and so forth. Somewhere in their lives, some went to work for the government. Others took the risk of working in the private sector.
You could even say that the federal government has been breeding these crooks and cheaters, setting the example, and it is supreme hypocrisy to punish corporations without doing the same to government. Put them all in the slammer, the biggest ones first.
Post Script
The $194.2 billion from entitlements listed under the national debt above includes annual interest. Thus, it is not a true representation of the surplus stolen from entitlements so far this year. I usually wait until the close of the fiscal year to take the average rate of interest and figure out how much real cash was stolen.
But if I had to guess what the total stolen from 20 entitlements will be this year, I would put it very close to the $160.7 billion of last year, maybe four or five billion more. Despite high unemployment, people working jobs for less pay, and several smaller entitlements like Highways and Airports & Airways drawing down on their trust fund holdings, the big entitlements like Social Security are running very close to last year. The Social Security Trust Fund is now 21.6 percent of the national debt.
And wouldn't it be interesting if both the "on budget" borrowing from the public as well as the "off budget" stealing from entitlements turned out to be $165 billion each. We would then have a "unified budget" at break-even that would look as follows:
Once interest is added into "off budget" entitlements, the national debt will have increased $400 billion or more. Wouldn't that be some break-even?
When are we going to have "hard time for hard crime" for government just as Harvey Pitt, Director of the Securities and Exchange Commission (SEC) recommends for corporate crooks?
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Ed Henry is the founder of TUFF, the Taxpayers Union, and a regular columnist for Ether Zone.
Ed Henry can be reached at ctzcrank@mindspring.com |
