***Special thanks to commenter Hatfield McCoy for sending in the original article***
Dennis Cauchon: a voice in the wilderness.
Don’t feel bad if you don’t know who Mr. Cauchon is; neither did I. However, Dennis has been writing about a certain subject for at least the last 6 years and maybe it will catch someone’s eye this time.
He just published an article in the USA Today about the accounting practices of our very own Federal Government, and (surprise, surprise) found that they are playing by a completely different set of rules than the rest of us.
The big difference between the official deficit and standard accounting: Congress exempts itself from including the cost of promised retirement benefits. Yet companies, states and local governments must include retirement commitments in financial statements, as required by federal law and private boards that set accounting rules.
The deficit was $5 trillion last year under those rules. The official number was $1.3 trillion. Liabilities for Social Security, Medicare and other retirement programs rose by $3.7 trillion in 2011, according to government actuaries, but the amount was not registered on the government’s books.
This is horrific; it borders on criminal. Heck, it WOULD be criminal if this were done by a private firm, and not Big Daddy Government.
As I mentioned, Dennis has been writing about this for a while now. From way, way back in 2006:
The federal government keeps two sets of books.
The set the government promotes to the public has a healthier bottom line: a $318 billion deficit in 2005.
The set the government doesn’t talk about is the audited financial statement produced by the government’s accountants following standard accounting rules. It reports a more ominous financial picture: a $760 billion deficit for 2005. If Social Security and Medicare were included — as the board that sets accounting rules is considering — the federal deficit would have been $3.5 trillion.
Congress has written its own accounting rules — which would be illegal for a corporation to use because they ignore important costs such as the growing expense of retirement benefits for civil servants and military personnel.
No big revelation here: Big Daddy plays by his own set of rules, and tells us only as much as we make him. This is not the way it was supposed to be. It’s certainly not what is in the Constitution, and it isn’t what we should expect or accept today. In the Gettysburg Address, Lincoln said “Government of the people, by the people and for the people, shall not perish from the earth”, which was an elegant way of describing the freedom that comes from self-government. As many have said before me, freedom isn’t free: it takes work and energy, in peacetime as in war.
If we passively give up that freedom by not being informed, whether through apathy or ignorance, we deserve the government we get.