Two sets of books....

[Joanne98]

Last night Lou Dobbs shocked his viewers by reporting that the federal goverment keeps two sets of books. Here's a USA article that explains why he's bringing this up. This is going to be a very big story.

http://www.usatoday.com/printedition/news/20060803/1a_coverart03.art_dom.htm

What's the real federal deficit?
How many billions (or trillions) of dollars depends on how you do the accounting
By Dennis Cauchon
USA TODAY

The federal government keeps two sets of books.

The set the government promotes to the public has a healthier bottom line: a $318 billion deficit in 2005.

The set the government doesn't talk about is the audited financial statement produced by the government's accountants following standard accounting rules. It reports a more ominous financial picture: a $760 billion deficit for 2005. If Social Security and Medicare were included — as the board that sets accounting rules is considering — the federal deficit would have been $3.5 trillion.

Congress has written its own accounting rules — which would be illegal for a corporation to use because they ignore important costs such as the growing expense of retirement benefits for civil servants and military personnel.

Last year, the audited statement produced by the accountants said the government ran a deficit equal to $6,700 for every American household. The number given to the public put the deficit at $2,800 per household.

A growing number of Congress members and accounting experts say it's time for Congress to start using the audited financial statement when it makes budget decisions. They say accurate accounting would force Congress to show more restraint before approving popular measures to boost spending or cut taxes

[no_hypocrisy]

1. What a shock. The accounting of the federal government is equivalent

to that of Enron, if not worse.

[HereSince1628]

2. Well, it's taking its time growing. This has been laid out there

a number of times and it's not yet implanted.

It's all about enabling liars to build a more satisfied if more Straussian society. I am convinced that this has become the true job of Congress.

[Oversea Visitor]

3. Just like ENRON

you guy in deep shit creek

[elehhhhna]

25. The MBA President SAID he would emulate Great Corporate Leaders. Hello?

Did anybody think he meant anyone other than Ken Lay?

[soothsayer]

4. Maybe if rummy finds the missing 2.6 trillion the pentagon "lost"

Testimony before the House Appropriations Committee: Fiscal Year 2002 Defense Budget Request
As Given by Secretary of Defense Donald H. Rumsfeld, Chairman of the Joint Chiefs of Staff General Hugh Shelton, and Comptroller Dov Zakheim,
Rayburn House Office Building, Washington, DC, Monday, July 16, 2001.

SEC. RUMSFELD: Mr. Congressman, thank you very much. Your question is, of course, right at the heart of an enormously important issue for the Department of Defense. We have a panel in the Quadrennial Defense Review on this subject. We have met with it twice in the last two weeks. We're obviously going to have to meet with it again. It is a big, broad, complicated subject.

As you know, the Department of Defense really is not in charge of its civilian workforce, in a certain sense. It's the OPM, or Office of Personnel management, I guess. There are all kinds of long- standing rules and regulations about what you can do and what you can't do. I know Dr. Zakheim's been trying to hire CPAs because the financial systems of the department are so snarled up that we can't account for some $2.6 trillion in transactions that exist, if that's believable. And yet we're told that we can't hire CPAs to help untangle it in many respects.

[Joanne98]

7. From the article. The DOD can't get auditors to certify their books.

These laws have dramatically improved federal financial reporting. Today, 18 of 24 departments and agencies produce annual reports certified by auditors. (The others, including the Defense Department, still have record-keeping troubles so severe that auditors refuse to certify the reliability of their books, according to the government's annual report.)

The military industrial complex is stealing us blind.

[Toots]

5. Something is not quite right with this piece

I was under the impression Social Security was still very much in the black. In fact Bush* is and should be attacked for getting into SS surplus. That was the big deal with Gore's Lock box. Gore wanted to prevent Congress from dipping into SS surplus and spending it on other things such as War. Bush* swore during that campaign that he would protect SS surplus and it would not be touched. Ha Ha. According to this article though by adding SS and Medicare it would add 10 fold to the deficit. How does surplus add to a deficit?

[Joanne98]

9. Clinton kept two sets of books too. There was no surplus.

This is just one more reason Hillary is NOT going to be the Democratic nominee for 2008. I suggest Eliot Spitzer. He's the only one who can clean up Washington.

[elehhhhna]

29. True. The surplus was a future projection.

[Toots]

54. I'm talking just about SS not the entire bidget

Social Security has been running a surplus for years and years and Congress has been taking that surplus and putting it into the general budget which is in Deficit. It isn't enough surplus to counter the overspending Congress does and should be left alone. It is not tax money. They need more money they should raise taxes or quit their spending not rob other programs..

[Lasher]

56. You are correct about the Social Security surplus

The Social Security trust fund consists of US Treasury Bonds that are currently worth almost $2 trillion. Here is a site where you can view the current amounts of the General Fund deficit (representing the national debt), the Social Security trust fund, and the Medicare trust fund.

Since the Reagan administration we have been paying extra FICA taxes to intentionally build up the trust funds in order to accommodate boomers when they retire. There are those who are intent on gutting these social programs and stealing the surpluses. Their campaign to do exactly that, which has been under way since 1982, includes the spread of disinformation by their propaganda wings such as the Cato Institute and the Heritage Foundation. Often-repeated claims that the Social Security trust fund has "already been spent" and that it consists of "nothing but worthless IOUs" are intended to confuse and lower expectations, thereby reducing the public's opposition to their attack.

In addition to this campaign of disinformation, their scheme for the theft of the Social Security trust fund includes a strategy known as starve the beast. Essentially this consists of driving the nation deeply into debt by cutting taxes for the wealthy. The ensuing fiscal calamity can then be cited as an excuse for cutting the New Deal social services that are hated by many Republicans.

The trust fund will not be stolen by people sneaking into a West Virginia bank with wheelbarrows. The theft will occur by taking steps to ensure that the general fund never redeems the Treasury Bonds that are held by the trust fund. This will be accomplished by a drastic reduction of benefits that ensures income from FICA taxes alone will forever sustain what is left of Social Security. This is what Republicans are talking about when they mention Social Security reform.

And where will this stolen money go? Junior has already given a sizeable advance to the wealthy elite, in the form of tax cuts. Get it?

The only real danger to Social Security comes from Congress. We can stop all this by taking back control in November. Then all benefit reductions should be prevented, and the general fund should redeem the Treasury Bonds, as planned.

Ten Myths About Social Security

[butterfly77]

55. I believe that this is some more covering up and ....

cooking of books to protect bush and the gang because if the dems win there will be investigations. This is somemore BUSHIT!

[Sgent]

63. Social Security

is cash flow positive:

Cash in - Cash out > 0

It is financially lossing money:

Total Reciepts - Present Value of New Obligations - Cash Out < 0

Cash flow accounting is only allowed for individuals and the government. If I take a loan out for 10,000, and promise to pay back 12,000 in 5 years -- the government considers the 10K income. They ignore the 12k owed until 5 years from now.

[Octafish]

6. Either way, BushCo is stealing us blind.

They looted the Treasury and fixed the tax code so the rich get richer and poor get poorer and the middle class gets evaporated.

Soon, the USA will resemble Haiti where one-percent of the population own 99-percent of the wealth.

[Joanne98]

10. Bushwacked!

[lonestarnot]

44. Blind, poke your eyes out blind. Stick in your eye blind!

[DemonFighterLives]

8. I had a thread on this yesterday

It kind of died= not much interest.
Maybe everyone already knows the numbers are phony to make the chimp look good.
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=364x1890178

:kick: and :rec:

[Joanne98]

11. It will take awhile for it to sink in. Keep posting. It's REALLY important

[AzDar]

12. Kick! n/t

[Joanne98]

13. Diebold accounting software has two sets of books too.

Oldie but goodie....

August 31, 2004
Pushing all my armchair conspiracy theorist buttons
Black Box Voting has uncovered a very very disturbing security flaw in Diebold's vote-counting GEMS software. You know how we've all been worried about how individual voting machines are not secure and may be vulnerable to tampering? That's nothing compared to the central tabulators that actually count the votes. You'll be ever-so-reassured to know that the tabulators have a deliberately programmed ability to create a second set of files with altered vote counts.


It is never appropriate to have two sets of books inside accounting software. It is possible to do computer programming to create two sets of books, but dual sets of books are prohibited in accounting, for this simple reason: Two sets of books can easily allow fraud to go undetected. Especially if the two sets are hidden from the user.

The data tables in accounting software automatically link up to each other to prevent illicit back door entries. In GEMS, however, by typing a two-digit code into a hidden location, you can decouple the books, so that the voting system will draw information from a combination of the real votes and a set of fake votes, which you can alter any way you see fit.

That's right, GEMS comes with a secret digital "on-off" switch to link and unlink its multiple vote tables. Someone who tests GEMS, not knowing this, will not see the mismatched sets of books. When you put a two-digit code into a secret location can you disengage the vote tables, so that tampered totals table don't have to match precinct by precinct results. This way, it will pass a spot check -- even with paper ballots -- but can still be rigged.

[lonestarnot]

23. Why don't you post step by step directions so we can all have a whack

at it.

[Joanne98]

32. I think someone already did that.

[lonestarnot]

33. I would like a link.

[Joanne98]

38. Here

http://www.youtube.com/watch?v=FhMUtzOxjJY

Here's another one for fun

http://www.youtube.com/watch?v=HvwnJqLLgK8

[lonestarnot]

39. cool. Thanks J!

:hi:

[DemonFighterLives]

14. From the article

Social Security chief actuary Stephen Goss says it would be a mistake to apply accrual accounting to Social Security and Medicare. These programs are not pensions or legally binding federal obligations, although many people view them that way, he says.

Social Security and Medicare are pay-as-you go programs and should be treated like food stamps and fighter jets, not like a Treasury bond that must be repaid in the future, he adds. “A country doesn't record a liability every time a kid is born to reflect the cost of providing that baby with a K-12 education one day,” Goss says.

====
I don't get where anyone thinks that they can just take our SS money and do as they please.
:argh:

SS security belongs to us and the money grubbers better keep their hands off.
:mad:

[Joanne98]

16. It's treason. Damn thieves. They used the FICA money to...

CUT TAXES FOR THE RICH! When the public finds out we're bankrupt, they're going to want to shoot them. I can't wait. Go Lou Dobbs!

[Lasher]

57. Not like a Treasury Bond that must be paid in the future?

Very sinister choice of words. That is exactly what the Social Security trust fund consists of.

[Joanne98]

15. We could be heading into an "Argentina economic collapse"...

As I remember, their currency became worth nothing overnight..

http://en.wikipedia.org/wiki/Argentine_economic_crisis_(1999-2002)

There was a good book wrote on this but I can't remember the name. The IMF caused this with their "debt re-structing" program. Something we need to make sure doesn't happen to us. Especially since Wolfowitz is the World Bank President.

[fasttense]

17. Interesting that the public members of the federal accounting board

want to add in SS and medicare but the public members (who represent our government) don't.

Their excuse to not include them is because Congress has the authority to increase or reduce social insurance benefits at any time. Well I have the authority to increase or reduce my electricity use at any time too, but if I don't budget for it and pay my bill, I get no electricity.

"The proposal to add Social Security and Medicare to the bottom line has deeply divided the federal accounting board, composed of government officials and “public” members, who are accounting experts from outside government.

The six public members support the change. “Our job is to give people a clear picture of the financial condition of the government,” board Chairman David Mosso says. “Whether those numbers are good or bad and what you do about them is up to Congress and the administration.”

The four government members, who represent the president, Congress and the Government Accountability Office, oppose the change. The retirement programs do “not represent a legal obligation because Congress has the authority to increase or reduce social insurance benefits at any time,” wrote Clay Johnson III, then acting director of the president's Office of Management Budget, in a letter to the board in May."

[Joanne98]

20. They're pretty much saying they're "not going to pay" SS or medicare

obligations. Here:

The retirement programs do “not represent a legal obligation because Congress has the authority to increase or reduce social insurance benefits at any time,” wrote Clay Johnson III, then acting director of the president's Office of Management Budget, in a letter to the board in May."

They just don't want the public to figure it out. I hope Lou Dobbs does this story every single night. The voter's are going to kill them.

[Joanne98]

18. Here's the re-structuring plan.

Somebody should warn the American people....Private Sector Development Strategy (PSDS) Fascist bastards.

September 2002 - VOLUME 23 - NUMBER 9

http://www.multinationalmonitor.org/mm2002/02september/sept02corp1.html

--------------------------------------------------------------------------------
W o r l d B a n k / I M F P r i v a t i z a t i o n M a n i a
--------------------------------------------------------------------------------


Obsessed
The Latest Chapter in the
World Bank's Privatization Plans

By David Tannenbaum
It is hardly news that the World Bank is a major proponent of privatization. But a new Private Sector Development Strategy (PSDS) promises to intensify the Bank's support for privatization, extend its privatization advocacy to sectors still generally conceived of as quintessentially public, and introduce novel approaches to create private markets where none now exist.

Drafted by Bank staff in 2000, the PSDS faced immediate controversy. Non-governmental advocacy groups worldwide objected to the rough proposal, urging it be ditched. That recommendation was ignored. The Bank redrafted and refined the PSDS, but its fundamental approach remained unchanged.

The World Bank Executive Board approved the PSDS in February 2002. The World Bank will initiate the PSDS in Africa, East Asia and South Asia in fiscal year 2002, and all Bank regions will be included in the plan by the end of fiscal year 2004.

The PSDS is an unusual document. It discusses an overall plan without clearly marking out the details, or the concrete policy implications of broad, overarching statements.

Thus the Bank can argue that the rising concern among development advocates about the PSDS is misguided. "Nothing in the strategy is incredibly novel," says a spokesperson for the World Bank designated to answer questions about the PSDS. "It is a continuation rather than anything incredibly new or novel." The spokesperson requested anonymity.

But critics see a nefarious, ideologically-driven plan to privatize much of the remaining government infrastructure in developing countries, without regard to the impact on developing country economies, and particularly on the poor.

Bank protestations to the contrary notwithstanding, it seems clear that the PSDS is, at least, a far-reaching blueprint that radically departs from the conventional wisdom that has governed infrastructure and social sector management in the developed world.

"The PSDS is a recipe for transforming the World Bank Group in a very fundamental way," says Nancy C. Alexander, of the Citizens' Network on Essential Services. "Under the PSDS, private sector operations would characterize the main purpose of the World Bank Group."

Investment Climate Change
A key prong of the PSDS is to more systematically attach conditions to future loans that are meant to "improve the investment climate" in developing countries. These changes are meant to facilitate the growth of the private sector. The Bank also plans to incorporate surveys of "investment climate" in future strategy papers, and to expand its business development services and microfinancing schemes to small- and medium-sized firms.

Almost no one disputes the importance of some of the generic attributes of a sound investment climate ó respect for the rule of law, a functioning court system, streamlined rules to establish new businesses, a well-functioning infrastructure including transport and electricity, an educated workforce.

But the Bank's historical record suggests it is concerned with another set of investment indicators.

The PSDS states, "A significant part of the existing work on policy reforms, such as that on privatization, competition policy, deregulation and strengthening of property rights, will help improve the investment climate in client countries." In the past, these reforms have translated into lower taxes on businesses that starve governments of resources, labor law changes that weaken protections for workers, destabilized social safety nets and lower wages .

An additional concern is that "improving investment climate" is really code for "improving foreign investment climate." "The standards that the Bank proposes are heavily biased to the foreign private sector," says Alexander.

David Ellerman, economic adviser to the chief economist of the World Bank, suggests there might be cause for Alexander's concern. "Making the investment climate better for one group may well be at the cost of making it worse for another group," he writes in a memo. "The Bank tends to ignore these tradeoffs and to implicitly identify with one group (usually external or foreign investors)."

The World Bank spokesperson counters that the Bank is trying to spread "best practices" throughout the entire economy. "We're trying to improve the investment climate for everyone, not just foreign direct investors. Ö If foreign investors just have their own enclaves, that's not good for the community."

But the plan does suggest eliminating rules that favor domestic industries or service providers. Alexander argues that this will ultimately hurt developing economies. "Domestic providers are by definition in most countries small and somewhat non-competitive. So it's really a death sentence for these small- and medium-sized enterprises to be subject to blasts of foreign competition."

Privatized Services and Inequality
The PSDS is heavily focused on the privatization of social services and infrastructure. Among the elements of the plan are "policy-based lending to promote privatization," "dealing" with labor retrenchment and environmental aspects of privatization, and strengthening privatization agencies. Key to the PSDS is an expansion of the activities of the International Finance Corporation (IFC), the affiliate of the Bank that makes loans in the private sector and is the Bank's most aggressive and innovative privatization advocate. The IFC will give advice to private companies, and will make investments in privatized infrastructure enterprises and in private health and education facilities.

http://www.multinationalmonitor.org/mm2002/02september/sept02corp1.html

[OregonBlue]

40. Send it to Lou. He may have already read it but if not, he should.

Wolfowitz is now head of world bank. This fits with his objectives.

[Joanne98]

42. I know. I know. Wolfie at The Bank. It gives me nightmares.

[Lasher]

62. I did not until now realize the significance of this.

That is, Wolfowitz being appointed to head the world bank. And I didn't realize the extent of the world bank's potential to enforce neocon economics worldwide. I'm starting to think that global economics are inevitable because the world bank makes sure this is so.

[lonestarnot]

19. Wonder if anyone is shocked for real?

[Joanne98]

21. I'm shocked that somebody's actually reporting it.

[lonestarnot]

22. keep her kicked!

[DemReadingDU]

24. I have always suspected that our government

was another Enron, so very corrupt

[elehhhhna]

26. A major in Forensic Accounting will unlock some excellent career

opportunities in the future, guaranteed. Programmers will be needed to set & and analyze data, as well as data-entry clerks...

[Joanne98]

28. I need someone to explain the "complex instruments" the hedge funds

are using. We may need them to read the budget.

[elehhhhna]

30. CALLING PROFESSOR GAC!

If you find Professor GAC & pm him (her?) you'll get info you (or I) can actually understand.

[Joanne98]

34. Thanx I'll remember that.

[elehhhhna]

35. I just PM'd GAC. Watch this thread.

[Joanne98]

48. Okay. But I may have to go to the store.

[elehhhhna]

50. LOL We'll be here when you get back.

[The Backlash Cometh]

27. Well, if they're keeping two books, it explains why they put up with

the local corruption instigated by attorneys.

The tipping point has tipped so far, we're upside down.

[halobeam]

31. Lots of moderate conservatives watch Lou.....

hope he hits on this everyday, just like he did illegal immigration. He informed with his reports, he had guest after guest and it needs to be done again. I didn't and don't always agree with him, thats for sure, but if he can educate those who are at least trying to understand what this means, then I give him a green light to GO !!!

[Joanne98]

41. That's why I love Lou. He reaches middle America and we need their

attention.

[lonestarnot]

36. More than 80 companies have admitted they are under investigation

for their top execs. theivery by way of back dating stock options. That way they steal directly from retirees pension funds. Theivery from every angle!

[SpiralHawk]

37. why do republicons lie to Americans about the deficiet?

The republicons owe us the truth. They must stop pretending to be conservatives, and own their radical, spendthrift, borrow-and-spend, spend spend ways.

They spend taxpayer money to enrich themselves like a pack of selfish drunken sailors.

[Joanne98]

43. They do it because they can. If we had a real press......

this wouldn't even have happened. Along with alot of other things. If this country goes bankrupt, it's partly their fault.

[glitch]

45. "Treating this country like a company in liquidation" - RFKjr

Just some good ole boy corporate raiders looting assets on a larger scale.

[Joanne98]

47. That liquidation plan has a name. See post 18

[glitch]

49. Even privatization implies continued existence if only temporarily.

I think this lot loots and runs. Scourched earth right here at home.

[Joanne98]

52. I think privatization is code for looting. lol

[glitch]

53. Actually, so do I! The way these guys do it anyway. It didn't have to be,

Not that I was ever for it! But "in principle" it didn't have to be so thoroughly corrupt and economy-killing.

[dkofos]

46. Would you expect anything less from these bastards.

[oxbow]

51. Maybe someone should report this with a different title

This little tidbit definitely should not be going down the memory hole!

[TexasLawyer]

58. The new Medicare prescription-drug benefit

I love how Dems get tagged with the "tax-and-spend" label. Look at what the "spend-and-spend" GOP has done to the deficit--

<snip>

The new Medicare prescription-drug benefit alone would have added $8 trillion to the government's audited deficit. That's the amount the government would need today, set aside and earning interest, to pay for the tens of trillions of dollars the benefit will cost in future years.

Standard accounting concepts say that $8 trillion should be reported as an expense. Combined with other new liabilities and operating losses, the government would have reported an $11 trillion deficit in 2004 — about the size of the nation's entire economy.

<snip>

[TexasLawyer]

59. kick

[kineneb]

60. may I commend readers to DU posts by unlawfulcombatnt

he has been pointing out this fact for some time. The figures reported always seem to get, ahem, "adjusted".

as an example, see:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=2774348&mesg_id=2774348

[Joanne98]

61. Thanx. I watch for his stuff.