Perhaps the most disgusting aspect of this whole stock market, corporate accounting mess is that these politicians have accepted the role as our economic saviors. Senators and Representatives are riding to the rescue! They’re going to save us all!
Wake up! When it comes to accounting scandals, cooking the books, lying to shareholders and filing false balance statements there is not one corporate CEO out there who can hold a candle to the Imperial Federal Government of the United States. The lies told to corporate shareholders by corporate officers are but little fibs concerned to the constant, year-after-year blatant lies told to the American people by politicians and government officials.
So … WorldCom inflated earnings by just short of $4 billion. Big deal huh? CNN’s Jonathan Karl reports that congress recently voted for a $15 billion bailout of the railroad pension fund. That’s billion with a “B”… fifteen of them. This doesn’t appear on the balance sheet. It doesn’t show on the books. This means that on this one issue alone – the railroad retirement bailout, congress has inflated earnings by a factor of four times more than WorldCom. Let a corporation do this and someone goes to jail.
Another accounting trick the government recently pulled. Politicians decided to pay military personnel one day earlier … just before the end of the last fiscal year. This pay day costs the government about $2.3 billion. By moving the payday from the first day of the new fiscal year to the last day of the last fiscal year the politicians can claim a $2.3 billion savings on the current budget. They don’t mention that they just inflated the deficit on the last budget by the same amount.
The Social Security Trust Fund. It doesn’t exist. It’s nothing but a stack of IOUs from the federal government that rest in a file in a filing cabinet in West Virginia. (No kidding! A file cabinet in West Virginia!) These IOUs say that the government owes the Social Security all of the money it has seized from Social Security taxes to pay for various vote-buying schemes. The government doesn’t have the money to pay back these IOUs. Thus, there is NO Social Security Trust Fund. Oh, by the way. The government does not show the money that it owes to the Social Security Trust Fund as a liability on its books. There’s a law out there called the Employee Retirement Income Security Act, “ERISA,” as it’s know by pension fund administrators. ERISA would prohibit a corporation from doing what the federal government does with the Social Security Trust Fund. You won’t be surprised to learn that ERISA doesn’t apply to congress.
Now … from Jonathan Karl’s report, a quotation from David Stockman, Ronald Reagan’s budget director in 1985.
“We have increasingly resorted to squaring the circle with accounting gimmicks, evasions, half-truths and downright dishonesty in our budget numbers. If the SEC had jurisdiction over the executive and legislative branches, many of us would be in jail.”
Bad corporations? The market is punishing them right now. You can also punish them by refusing to do business with them.
Bad governments? How do we punish them? At the ballot box? That’s a laugher. This year over 95% of all incumbents – the people who have been cooking the books for years – will be returned to office.”
And we wonder why the stock market is down when all economic indicators show a strong economy? Would you invest knowing that Congress is chomping at the bit to slay this dragon they created? Says a lot doesn’t it?
