QOTD: Government “Accounting”

 

The one major fiscal area where generally accepted accounting principles and independent accountants have remained rare is in government.  Indeed, a century later, most state governments, while often requiring their creatures to adhere to GAAP, do not do so themselves.  And the federal government–the largest fiscal entity on earth–still keeps its books in much the same way as it did in the nineteenth century.  With no countervailing forces, such as the Wall Street banks and the Stock Exchange, to exert the needed pressure, the “managers” of government–the legislators, governors, and presidents–have been able to put their self-interests ahead of those of the “stockholders”.

The above quote, from author John Steele Gordon in his book “An Empire of Wealth“, written in 2004, pretty fairly describes the way our U.S. governments keep their books, and who benefits from the “loose” accounting found everywhere these days.

It is in the interest of all government units for the “stockholders” to remain ignorant of where their hard-earned tax dollars are going, and they mostly succeed.  The bigger the government, the more successful it is in hiding all the spending and waste of taxpayer money.

“T’was ever thus.”

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  1. kedavis Member
    kedavis
    @kedavis

    If government did proper accounting, they might become… accountable!

    And they can’t have THAT!

    • #1
  2. Percival Thatcher
    Percival
    @Percival

    Rules are for the subjects.

    • #2
  3. Full Size Tabby Member
    Full Size Tabby
    @FullSizeTabby

    An accounting system that calls an increase of less than a predetermined amount a “decrease” is not a real accounting system. 

    • #3
  4. Percival Thatcher
    Percival
    @Percival

    Full Size Tabby (View Comment):

    An accounting system that calls an increase of less than a predetermined amount a “decrease” is not a real accounting system.

    Yeah, but the innumerate clods that they use to promulgate that twaddle eat it right up.

    • #4
  5. Rodin Member
    Rodin
    @Rodin

    Government routinely does that for which others are jailed. Bernie Madoff was a piker.

    • #5
  6. Mark Camp Member
    Mark Camp
    @MarkCamp

    RushBabe49:

    “And the federal government–the largest fiscal entity on earth–still keeps its books in much the same way as it did in the nineteenth century.”

    There is one particularly consequential non-GAAP practice that I thought was not introduced until the 20th century: the practice of creating fictitious securities where the Government is both the borrower and the lender, as done with Social Security and Medicare.

    I would be interested to know if I was wrong–if this form of accounting fraud began in the 1800s. Does anyone who read the book know the answer?

    • #6
  7. Raxxalan Member
    Raxxalan
    @Raxxalan

    Percival (View Comment):

    Rules are for the subjects.

    I can not “like” this because its is absolutely anti-American.   It is however an accurate statement of the sorry state of affairs we find ourselves in.

    • #7
  8. Bryan G. Stephens Thatcher
    Bryan G. Stephens
    @BryanGStephens

    kedavis (View Comment):

    If government did proper accounting, they might become… accountable!

    And they can’t have THAT!

    Sounds like Sir Humphry

    • #8
  9. Percival Thatcher
    Percival
    @Percival

    Raxxalan (View Comment):

    Percival (View Comment):

    Rules are for the subjects.

    I can not “like” this because its is absolutely anti-American. It is however an accurate statement of the sorry state of affairs we find ourselves in.

    The fact is that we are not subjects, we are citizens, a fact which they will be reminded of with as much emphasis as is required.

    Plus a little, so it will stick this time.

    • #9
  10. Raxxalan Member
    Raxxalan
    @Raxxalan

    Percival (View Comment):

    Raxxalan (View Comment):

    Percival (View Comment):

    Rules are for the subjects.

    I can not “like” this because its is absolutely anti-American. It is however an accurate statement of the sorry state of affairs we find ourselves in.

    The fact is that we are not subjects, we are citizens, a fact which they will be reminded of with as much emphasis as is required.

    Plus a little, so it will stick this time.

    It is actually even worse than that.  Collectively we are the Sovereign, so this could be considered a usurpation.

    • #10
  11. She Reagan
    She
    @She

    I really noticed this phenomenon during my time working in healthcare IT, when so much of what I did was bound up with keeping the organization compliant with government (state and federal) regulations dictating how we did everything, and the hoops that we had to jump through to get it done in ways that would insure we weren’t sued for malfeasance, or had payment withheld for non-compliance.

    Sooner or later, even a dolt such as myself could see that we were put through the wringer with directives sometimes almost impossible to accomplish in the stated way or timeframe, or with demands sometimes in direct contradiction to other, also “mandatory” requirements.

    Somewhere in the middle of managing an enormous project to make sure that no bit of email that might possibly contain a scintilla of patient information left the facility without being encrypted; to make sure that every email sent and received was permanently and securely archived; and to make sure that all the requirements for timely retrieval and disclosure were met (this was only one of several such projects at the time–all the way from securing mobile devices to locking down CD drives, USB ports or any other mechanisms through which data might have left the facility without authorization), it came to my attention that the United States Secretary of State–Hillary Clinton–was using an unencrypted, non-work, email account, and that her IT network was put together with chewing gum and baler twine by an outfit that wasn’t part of the US government IT infrastructure, and that it was running from a server housed in a bathroom.  Shortly thereafter, I found out that a bunch of her work had ended up on Anthony Weiner’s laptop.

    It wasn’t that any of this particularly surprised me.  But it did “concentrate the mind wonderfully,” as Samuel Johnson might have said.

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    • #11
  12. Bryan G. Stephens Thatcher
    Bryan G. Stephens
    @BryanGStephens

    As you say, She, the rules for them are different. 

    • #12