If the government accounted for its liabilities the same way most corporations have to, annual deficits, the national debt, and government spending as a percentage of GDP would be much higher. From Peter Diekmeyer at wolfstreet.com:
US federal government spending is expected to bloat to over $4.7 trillion during fiscal 2020, according to Congressional Budget Office data released this week. However, aggressive accounting may be hiding a far worse situation.
Total spending by the Trump Administration this fiscal year may be more than double what the non-partisan CBO admits. Worse, overall US federal, state and local government spending may exceed 60% of GDP.
So calculates a Chicago-based accounting watchdog. “Government budgeting works on a cash basis,” explains Sheila Weinberg, founder and CEO of Truth in Accounting. “That enables them to leave many of their expenses and liabilities off the books.” Weinberg, a CPA who has testified before Congress and the Federal Accounting Standards Advisory Board, has been calling out shifty government reporting for nearly two decades.
“Truthful accounting is key for citizens, legislators and the press to understand public finances,” says Weinberg. “Without the right information, it’s hard—if not impossible—to make effective decisions about public policy.”
The scale of the laxness that Weinberg has uncovered is staggering. TIA data suggest that total US government debt currently tops $104 trillion when unfunded liabilities are included, nearly five times as high as the official figures suggest.
Weinberg isn’t alone. In Canada, Al Rosen, a forensic accountant and co-author of Easy Prey Investors , has long claimed that private sector investors are being “systematically swindled out of large amounts of retirement savings” due to inadequate reporting standards.
However, according to Laurence Kotlikoff, it’s governments that are setting the pace. Kotlikoff, an economics professor at Boston University, calculates that based on fiscal gap accounting, the US government owes $200 trillion more than it admits.
To continue reading: More Shifty Accounting: US Public Sector Spending May Exceed 60% of GDP