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Government Accounting Is Fraudulent

April 8, 2016

Government Accounting Is Fraudulent

The Government Accountability Office (GAO) is the non-partisan auditor and investigator for Congress.

The GAO says that the U.S. government’s records are so poorly kept that it can’t really audit them.  Specifically, the GAO provided a report to Congress yesterday stating:

The federal government was unable to demonstrate the reliability ofsignificant portions of its accrual-based financial statements as of and for the fiscal years ended September 30, 2015, and 2014, principally resulting from limitations related to certain material weaknesses in internal control over financial reporting and other limitations affecting the reliability of these financial statements. For example, about 34 percent of the federal government’s reported total assets as of September 30, 2015, and approximately 19 percent of the federal government’s reported net cost for fiscal year 2015, relate to three CFO Act agencies—the Department of Defense (DOD), the Department of Housing and Urban Development, and the U.S. Department of Agriculture—that received disclaimers of opinion on their fiscal year 2015 financial statements. As a result, we were prevented from providing an opinion on the accrual-based financial statements.

The federal government did not maintain adequate systems or have sufficient appropriate evidence to support certain material information reported in its accrual-based financial statements. The underlying material weaknesses in internal control, which have existed for years, contributed to our disclaimer of opinion on the accrual-based financial statements as of and for the fiscal years ended September 30, 2015, and 2014.  Specifically, these weaknesses concerned the federal government’s inability to

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·         adequately account for and reconcile intragovernmental activity and balances between federal entities;

·         reasonably assure that the government wide financial statements are (1) consistent with the underlying audited entities’ financial statements, (2) properly balanced, and (3) in accordance with U.S. generally accepted accounting principles (U.S. GAAP); and

…click on the above link to read the rest of the article…

BREAKING: US government releases its 2015 financial statements

February 26, 2016

BREAKING: US government releases its 2015 financial statements

Hot off the presses, the US government just published its audited financial statements this morning, signed and sealed by Treasury Secretary Jack Lew.

These reports are intended provide an accurate accounting of government finances, just like any big corporation would do.

And once again, the US government’s financial condition has declined significantly from the previous year.

For 2015, the government reports $3.2 trillion in total assets.

This includes everything from financial assets like bank balances to physical assets like tanks, bullets, aircraft carriers, and the federal highway system.

Curiously, the single biggest line item amongst these listed assets is the $1.2 trillion in student loans that are owed to the government by the young people of America.

This is pretty extraordinary when you think about it.

37% of the government’s total reported assets are student loans, which is now considered one of the most precarious bubbles in finance.

$1.2 trillion is similar to the size of the subprime mortgage market back in 2008. And delinquency rates are rising, now at 11.5% according to Federal Reserve data.

Plus, it’s simply astonishing that so much of the federal government’s asset base is tantamount to indentured servitude as young people pay off expensive university degrees that barely land them jobs making coffee at Starbucks.

On the other side of the equation are a reported $21.5 trillion in liabilities, giving the government an official net worth of negative $18.2 trillion.

This is down from last year’s negative $17.7 trillion and $16.9 trillion the year prior. It just keeps getting worse.

But there’s one thing that’s even more incredible about all of this.

You see, each year these financial statements are audited by the government’s in-house agency known as the Government Accountability Office (GAO).

All big companies do this. They publish financial statements, which are then reviewed by an independent audit firm.

…click on the above link to read the rest of the article…

GAO asks Congress to prepare for Peak Oil

February 13, 2016

GAO asks Congress to prepare for Peak Oil

[The Department of Energy (DOE) asked Robert Hirsch to come up with a peak oil risk management and mitigation plan which was published in 2005.  Nothing happened, so in 2007 the Government Accountability Office asked Congress to prepare for Peak oil because of the many risks that could suddenly force a sudden and steep decline of oil in addition to geological depletion. The GAO states that “according to DOE, there is no formal strategy for coordinating and prioritizing federal efforts dealing with peak oil issues, either within DOE or between DOE and other key agencies. While the consequences of a peak would be felt globally, the U.S., as the largest consumer of oil and one of the nations most heavily dependent on oil for transportation, may be particularly vulnerable. Therefore, to better prepare the United States for a peak and decline in oil production, we are recommending that the Secretary of Energy take the lead, in coordination with other relevant federal agencies, to establish a peak oil strategy. ”  

[It is easy to forget with the low oil prices we have today that Peak Oil hasn’t gone away. Low prices are actually alarming, it means that drilling and future exploration are stopping, setting us up for an even more dramatic oil shock in the future. Peak oil forces a shrinkage in economies, yet our system is predicated on endless growth of credit and debt paid back in an ever growing economy.  Shrinkage is highly deflationary. Credit disappears, oil companies can’t borrow to drill, and customers are so poor that oil at any price is too expensive, and demand drops.  The underlying biophysical reality is that the energy returned on invested is too low to run civilization. 

Alice Friedemann at www.energyskeptic.com]

…click on the above link to read the rest of the article…

Shocking, Little-Known Facts About Debt

November 12, 2015

Shocking, Little-Known Facts About Debt

Both liberals and conservatives assume they have a rough idea of how much “the debt” is.  But the real numbers are shocking …

Public Debt Is Soaring

Global debt has soared to $199 trillion dollars.

The debt to GDP ratio for the entire world is 286%.  In other words, global debt is almost 3 times the size of the world economy. (William Banzai sarcastically suggests we send out a space beacon asking aliens to bail us out.)

The Hill reports:

The former U.S. comptroller general says the real U.S. debt is closer to about $65 trillion than the oft-cited figure of $18 trillion.

Dave Walker, who headed the Government Accountability Office (GAO) under Presidents Bill Clinton and George W. Bush, said when you add up all of the nation’s unfunded liabilities, the national debt is more than three times the number generally advertised.

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“If you end up adding to that $18.5 trillion the unfunded civilian and military pensions and retiree healthcare, the additional underfunding for Social Security, the additional underfunding for Medicare, various commitments and contingencies that the federal government has, the real number is about $65 trillion rather than $18 trillion, and it’s growing automatically absent reforms ….”

But former Senior Economist for the President’s Council of Economic Advisers and current Boston University economics professor Laurence Kotlikoff says that – when unfunded liabilities are taken into account – the fiscal gap for the U.S. is actually 3 times higher … $205 trillion.

Many states are also deeply in the red … For example:

  • New Jersey faces a structural deficit of $10.2 billion dollars
  • Pennsylvania has to deal with a $2.3 billion budget deficit

And unfunded pension debts of the states collectively total between $1.4 trillion (according to Federal Reserve figures) and more than $3 trillion dollars (according to a Stanford finance professor).

Europe is in poor shape as well.  For example:

…click on the above link to read the rest of the article…

Olduvai IV: Courage
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Olduvai II: Exodus
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