Economic “house of cards” collapsing under $56 trillion burden

Friday, March 5, 2010

Since the original publication of my book, "Unaccountable Congress: It Doesn’t Add Up" in 1992, federal accounting measures still have not begun to add up. I have long tried to call attention to our inadequate federal budget, accounting, and reporting practices. Our “reported” national debt has grown from around $800 billion in 1980—which took two centuries to accumulate—to more than $12 trillion as of September 30, 2009, less than 30 years later. The Obama administration freely admits that it will rise to $20 trillion by 2020. It’s been a mindboggling increase, and to repeat what I said in Chapter 4 of my book in 1992, it will render the United States unsustainable and in need of a bailout itself.

 

Worse yet, the hole in our nation’s finances is actually $56 trillion, a far cry from the $12 trillion figure publicized by the government’s balance sheets, which leave off unrecorded liabilities and financial manipulations on a scale that would make the architects of the Enron, Tyco, and WorldCom frauds blush. Our nation’s accountants and lawmakers, in particular, should have been able to see the gathering storm.

 

America has a national debt of gargantuan proportions because of the continuing lack of transparency and accountability in government, coupled with the unbridled deregulation of the Bush/Cheney administration. The latest polls show the anger and resentment of the American people continuing to mount as they are slowly but surely waking up to this colossal national debt, which threatens to unleash an unstoppable financial tsunami on them and future generations.

 

We must take action now to require financial accountability in government. Anyone who chooses to inform themselves can clearly trace how bad accounting practices, unrestrained deregulation, and a credit card mentality fostered on Capitol Hill and Wall Street are all coming home to roost on Main Street. We have built an economic house of cards on negative personal savings rates, excessive consumption, and spending beyond our means—on both individual and national levels. Now, like poor Haiti, that house is falling in every direction. It’s going to require a lot of work to clean up the mess. And who is going to come to our aid? When I evaluate the situation and consider that Congress is still operating in the same manner it did in 1992, I only see another storm on the horizon.

 

As founder and president of Truth In Government, my message remains the same today as it has been since my years in Congress: It is crucial for us to restore integrity to the budget process and provide financial accountability to the taxpayers. We can no longer wait for the political will to confront these problems.

 

During the first term of the Obama Administration, we have watched a messy, brutally partisan political drama play out over a struggle about health care reform. Congressional representatives are being disingenuous: They know that the purported savings from the bills being floated won’t be realized until later, if at all, and yet they raise taxes now and continue to mislead the American people they are supposed to represent.

 

As I write this, President Obama is asking Congress to institute financial accountability through a number of measures, including a new Federal Reserve oversight increasing bank cash reserves and minimum capitalization requirements, as well as the creation of a new agency to oversee the marketing of financial products to consumers. It remains unclear whether any of these measures has a chance in our current hostile and partisan political climate, but Congress should realize the day is fast approaching when the American public will no longer stand for shady dealings, ethical lapses, and shell games with taxpayer money.

 

I am trusting that people will hear my message and demand more accountability from their congressional leaders. Maybe one day soon things will begin to add up in Washington so we can finally balance our federal books, make ends meet, and protect the greatest democratic nation ever conceived, by the best of the best—our founding fathers.

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