A BUDGET OF FLIM-FLAM ACTUALITIES
(with a whole lot of hooey….on the side)

We’ve just been presented with the President’s 2011- 2012 fiscal year’s budget. Its size alone tells us it’s a budget of flim-flam actualities, with a whole lot of hooey….on the side.

At three point eight TRILLION dollars, that’s a hell of an array of zeros to try and comprehend and digest, especially when one realizes that this is all for just one year of spending! Is our government really worth that kind of cost for just one year’s so-called services to the taxpayers? More importantly, does it truly represent our country’s actual financial condition today?

As taxpayers our answer has to categorically be – NO- to both of these questions. Worse yet, neither the Democrats nor the Republicans seem to be focused on the real problem with it. Simply put, it doesn’t present in any comprehensible way a balance sheet or profit and loss display between total revenues coming in, and total expenditures going out. It simply co-mingles all sorts of disparate elements together making it impossible for any taxpayers, and least of all any members of Congress, to make any sense of it.

Apparently – fiscal transparency – is neither an option nor desired. Instead they seem bent on deliberately obfuscating things by making them more complicated than they really are. If any of us operated a business enterprise or our personal financial affairs that way, the Attorney General, the Justice Department, and its IRS minions would be all over us, and we’d be facing long term residency in a Club Fed facility.

Let’s face it, budgets are not rocket science. No matter how you approach it, it always boils down to this….you have X amount of income/revenue coming in, and you have Y amount of expenses/outlays going out. The net difference of Z between them ends up as either a net positive (surplus), or a net negative (deficit). If you consistently build up surpluses, you then increase net asset value (worth). If you pile up deficits, you rapidly accrue a debt load which, combined with the interests that carries, ultimately brings you to bankruptcy. One would think that those working in government would understand all that.

Well, since they don’t seem able to do that on their own, here are some suggestions to help them figure it all out:
1) Immediately enact legislation requiring both the OMB and the CBO to produce, at the very least, mid-fiscal cycle balance sheets and P/L reports. While quarterly reports, just as businesses do, would be preferable, the practicalities involved with having government bureaucracies do that just isn’t feasible. So a mid-cycle report, and an end-cycle report, could be acceptable.
2) Such reports should make a clear distinction between revenues and expenses (showing either surpluses or deficits), and profit and loss, which reflect assets versus liabilities (debt).
3) Such financial reports should also clearly show the breakdown of total expenditures between the three branches of government, that is, the Executive, the Legislative, and the Judiciary, both in dollar amounts, and as their percentages of the whole.
4) Similarly, each branch would break down those expenditures among its budgetary units, to the last level, also by dollar amounts, and percentages of the whole.
5) Expenditures should be categorized as administrative/operating costs, and funded program costs, while un-funded program obligations, should be categorized as part of various liabilities, relating to debt.
6) Any deficits occurring in any given fiscal year would be proportionately distributed among the three branches of government, according to their percentage shares of the total budget. In turn, each branch would distribute their deficit slice among their budgetary units, in the same proportionate way. The end result of that approach would diffuse a deficit throughout the entire government structure, rather than engaging in useless partisan squabbles about which program to cut or not. It would be a politically neutral approach which both parties could thus support. Furthermore, as long as any part of such deficit was still outstanding, no new increases in budget allocations would be allowed.
7) Lastly, the P/L part of these reports, should show:
a) GDP
b) All assets both in dollars and as percentage of GDP
c) All liabilities both in dollars and as percentage of GDP
d) The net difference being the national debt both in dollars and as percentage of GDP.

As for Social Security and Medicare, since these are funded from separate taxes, they should be displayed separately from the General Budget, but with the same balance sheet and P/L approach. We would all then have a much clearer picture of how and where our tax dollars are being applied, and what our financial condition may actually be. We would have a much more rational basis for deciding how and in what way to both economize on spending and reduce our debt load.

As it is now….we haven’t a clue.

CENTURION