Understanding a Government Budget
It’s hard to survive a fair fight when you can’t see what you are fighting, but it is especially hard to win an unfair fight so blinded. Watching the unrest that has erupted in just the last week or so over new state leaders trying to trim and/or balance their state budgets in the face of well orchestrated, mostly union resistance to where they were suggesting the cuts, I was reminded of one of those “elephants in the room” as my brother so aptly put it in his article, Blue Smoke and Mirrors, written back in 2003. Since he was far more intelligent and educated than I, yet was willing to admit his shortcomings, I can do no less. While I too can handle an accounting ledger, perhaps better than most politicians we elect today, when the zeros keep piling up on the deficit side, it is hard to see the forest for the trees so to speak.
Now, it is bad enough that we have a president in the White House, who would be kicked out of any other job he might hold, based purely on job performance alone, who never had to prove his Constitutional eligibility for his office, and who now compounds his mistakes like a crooked banker compounds interest on bad investments, but now we should know beyond a shadow of a doubt that no government entity below him can ever be trusted to tell us the truth. Nor can we count on the fourth estate to be truthful while covering for such total corruption as exists in such governments.
Anybody who puts a lot of stock in budgetary fights, whether they be played out on the floor of Congress, in the backrooms beyond, or from the pens and keyboards of those bean counters and reporters, who think they know exactly what is going on in government accounting, is simply deluding himself. To say that the right hand doesn’t know what the left is doing is putting it far too mildly. Over the last few years, though, the problem has been greatly exacerbated as more and more people are waking up to two facts. Governments lie, and the media doesn’t even try to keep them honest.
One more fact of the human condition that we must also consider is that people are controlled by their pocketbooks. This is true no matter how bad it sounds. We are largely a fiscal animal, whether or not we try to maintain some sort of moral compass. If someone knows how to manipulate a society’s fiscal well-being, they are most of the way down the road of corrupting most of that society. With enough complicit secret keepers, by the time the real facts get sorted out, it is too late to save enough truth to matter.
Understanding a government budget accepts the fact that no one can be expected to understand something they have so little knowledge about. Each and every government in this country has been sufficiently corrupted so that no one has enough of the facts to formulate a complete understanding of the fiscal health of said governments, or the people to which they are supposed to answer. Alarmed yet? You should be.
Governments need money to operate. Sure. That’s a given, but they need much more money to control as completely as all governments want to. Anyone who believes that our governments, local, state, and federal, operate solely on the money they collect from taxpayers is woefully uninformed. Governments do not operate in the same way that businesses and individuals have to in reporting income vs. expenses on a balance sheet. They can manipulate their net worth any way they see fit, and there is little you or I can do about it. Moral governments are not supposed to profit, (hence the key words, “balanced budget”) but profit they do – all the while claiming to be “broke.” Other times they may claim a “surplus” which may or may not exist, and then proceed to further control the minds of the people who can keep the main players in power or send them packing accordingly. In other words, it is truly a shell game.
While we are all drawn into the muck of deciding what we can afford, (we, meaning government) we lose sight of the real issue – what government is supposed to do or not do. Our federal government, for instance, was NOT established to “take care of the people” as so many seem to think now. It was established to represent our interests to the rest of the world, and protect those interests from foreign threats and domestic criminals. That’s about it in a nutshell. It is not supposed to control the state and local governments beneath it by investing federal dollars in them, or withholding those dollars from states and localities that do not wish to allow such control. Likewise, state and local governments are not supposed to infringe on basic individual rights outlined in the Constitution any more than the federal government is supposed to be able to. Meanwhile, the only question most folks want answered is how can we afford the next government “program”?
Let me go way out on a limb here and say that we (any government) CAN afford anything we are stupid enough to say we want.
That is simply because the richest entities in this great country ARE governments and government entities.
While it can be made to look, on paper, like state, local, and especially the federal government are literally going broke, nothing could be further from the truth. There. I’ve said it. Let me quickly follow that up with this – “going broke” means that there is more on the credit side than the debit side of the balance sheet. Okay, that won’t mean a lot to anyone who has never trudged through the totally boring, confusing, and mundane subject of double entry bookkeeping, but it IS a much too simple way of explaining the whole thing. So, why do I say that we can afford anything? Because budgeting is not boiled down to a true balance sheet in government accounting. Pure and simple.
Whether or not our foreign enemies know this, as they banter on about stripping our pristine credit rating and replacing our dollar, I can’t be sure, but it doesn’t really matter because they would only be slitting their own throats to do this. The American dollar has propped up and financed so much of the world for the last hundred years or so that rejecting the value it represents would be tantamount to the financial ruin of everyone – except us. That’s right – I said, “except us.” Oh, I don’t doubt that the American people would suffer somewhat if that were to happen, but it sure as hell wouldn’t be the end of us!
I’ve written reams about the debt crisis and mortgaging our progeny’s future, how we should not raise the debt ceiling (and we shouldn’t!) and how we need to learn to live within our means – that’s all true. That’s all just good old common sense. The fact that our government even considered securing “loans” from foreign governments, (especially to the tune of our “debt” to China) is absurd! What Americans should realize is that we have done all this, including our ridiculous trade imbalance, in the name of diplomacy. Anyone in the world, (especially and including our own stupid citizens), who hates America, does so in total ignorance of what the world would have become without us, and with a very blind eye to history before the preceding 234 years.
What other country on the face of the earth can wave a checkbook at a problem anywhere else in the world and change it? That is precisely what America can and does do on a regular basis. That is the main reason we are hated. It is called, envy. Though our current president is trying with all his might to squeeze the life out of the golden goose, (because he hates us too) he won’t succeed. He isn’t supposed to succeed. His purpose is to distract. His purpose is to create chaos and crisis. His purpose is to turn American citizens against each other. His party has been infiltrated with archaic, long-failed philosophies that can never work in this country, although he and his minions are too arrogant to realize it. He flaunts the wealth of this country and the privileges he has been afforded in the face of friends and enemies alike, and doesn’t seem to even care.
Back to the balance sheet and the whole government budget thing – the people of this country are all wealthy beyond their wildest dreams, whether or not they know it. The holdings may be in the name of government and government entities, but we are the government. If you take stock of every piece of land, every building or improvement, every assigned mineral right on that land, investments by government entities in the largest corporations on earth, and every bit of income that has been earned on those investments from the beginning of the country, you might begin to grasp my meaning. Governments own the most valuable, wealth producing investments in the country, and those investments are in constant earning mode.
So why are we being told that governments are going broke, and our children’s futures have been mortgaged? Well, why do people who have plenty of money still borrow against their wealth for expenditures they wish to make? Happens all the time. “Credit” has been the way to go for a long time now, hasn’t it? The “buy on time” mindset is all a part of American life, and everyone is quite used to it. Not just that, but the percentage of the population that actually knows about government investments is miniscule. The discussion of the subject is taboo for politicians and government-controlled media alike, so don’t expect an exposé anytime soon. Also, it creates a convenient way to hide the real bottom line from the American people. Just one more distraction.
So, you can have a perfectly good portfolio of wealth and still end up ruining your credit rating. Sadly, everyone in today’s world is judged by that credit rating and how good they may look on paper. That is the judgment we see going on in governments in America right now. Full faith and credit – that is the standard by which our dollars must be judged. When we spread that faith and credit thin, and it gets reported all over the world that we are so “indebted” to other nations, it weakens the reliance on our dollars. The totally useless Federal Reserve pumps more dollars into the economy by “selling” more credit, (something individual states can’t do) which only makes us look less solvent. “Selling credit?” you might ask. “Don’t you mean buying credit?” No – credit is the product the Fed always sells, and it only buys us more trouble – every time they do it! The “unreal” wealth that is credit is what politicians can then manipulate like Monopoly money to control we, the people, so we stay distracted – either happily distracted or unhappily distracted – depending on how much of what we want we are actually getting.
Since the Federal Reserve gets to determine the well being of our economy via the manipulation of interest rates on the amount of money it prints, it is set up to literally bankrupt the country anytime it wishes – or it can continue to allow the growing debt and interest on it to choke Americans for years to come.
How many times have you heard of someone, who was supposedly quite rich, but never took care of his own finances, and one day woke up to the fact that an accountant or money manager had stolen him blind and that he was virtually bankrupt? It happens. You can bet a lot of distractions were going on in those situations.
The problem is that for too long we have allowed our government officials to be our money managers. We have allowed the government to take care of us, so-to-speak, to the point that we really have no idea what is going on with the true wealth of America. We haven’t kept our eye carefully on the ball of just what government is supposed to do and what it is NOT supposed to do. We have shirked so much of our individual responsibility that most folks will believe anything, (collectively speaking of course.)
Government is far too big. Too much government employment exists at all levels. Government employees who unionize and collectively bargain for their own benefit is diametrically opposed to the values and principles of our republic the way it was established. Too many people do not understand or accept this. Currently, we have a few principled politicians who are trying to point this out. They must do so by use of an income/expense balance sheet to show that government spends too much money. Indeed, many of them may not realize just how much hidden government wealth exists under those imbalanced balance sheets, but you can bet the real power mongers in government know all too well. Trimming the size and scope of government is an absolute necessity if we are to preserve freedom in America.
As I have said all along, informed individuals can make a difference. If one isn’t informed, then the unfair fight against collectivism is like accepting a blindfold before entering a combat zone against a whole unit of opposing forces. Being informed takes a lot of individual work and responsibility. While distractions can be a form of recreation, they must not be allowed to keep us from the hard work ahead of us if we are to save the republic.
My dear brother, bless his heart, made a valiant effort in his article I highlighted above, Blue Smoke and Mirrors, because he happened on some information that he found very disturbing. He made personal contact with one man he mentions, Walter Burien. My brother and I had many discussions on the subject in the years preceding his death, because I had done the research back then too. When I decided to see whatever happened to Mr. Burien, I found a very interesting and quite current video available at this link, which I implore you to watch. Set aside a couple of hours for it and push through to the end if you possibly can. Don’t expect to be entertained, for this is NOT a distraction. This is you, going into battle without a blindfold, armed with factual information, but only if you think it is important.
I will leave the rest of the vast amount of research you should want to do to you.