Saturday, November 19, 2005

There's No Accounting for Government

Assets and Liabilities

The European Union, like the United States government, is unable to achieve a "clean" audit of its books, this makes 11 years running for both. If these entities were funded by those expecting a return on their money, the funding would stop. But they of course arent private entities, funded voluntarily. They are funded involuntarily, through taxes.

Both the EU and the US have a problem with accounting for the debts owed and assets owned by the largest programs (or "entities" in accounting parlance). In the US this means the military and in Europe this means agriculture supports. They both have material trouble accounting for transfers to and from internal entities as well.

The US Government Accountability Office (GAO) estimates that each US worker has a net-present-value debt of $350,000 for unfunded US government obligations; this includes social security, pension, mortgage and medical guarantees.

If these governments were companies, they would be bankrupt. No one would buy their stock and no one would lend them money.

It is a sad state of affairs that people arent upset that our governments can't tell us for certain where our money is going. But like the power to tax, government is also unique in that it takes from the many and gives to the few. Thus the costs are dispersed and no one expects to see a direct return on their money, thus unaccountability is, unfortunately, acceptable. The only way to make these entities more accountable is to give them less to be accountable for.