AUG. 31, 2016

Introduction

How does one tell the American people that governments are stealing from them? They will not believe it. They believe the government and the elected officials. Only a nut would attempt to demonstrate that politicians are not completely honest. Well, I am that nut and I have the qualifications to prove that governments are stealing from them.

"Collecting more taxes than is absolutely necessary is legalized robbery." - Calvin Coolidge

Rene' Descartes, a French philosopher, wanted to prove that he existed. He said, "I think therefore I am." In this way he proved that he existed. Most Americans cannot prove that they exist because they do not think. They only parrot what the politicians and news media state are the facts. Thinking is work and Americans do not like it. Politicians and the news media consistently tell half truths and lies, and the American public refuse to think about what they are being told.

The people protest, riot, and viciously complain about religion, race, abortion, gay marriages, etc. They continually talk around the water cooler about SUVs, realty TV, Laci Peterson, Kobe Bryant, American Idol, etc.

Do the results of any of these issues really affect your way of life? Do they affect your standard of living; wages; whether you have a job; outsourcing issues; how much money you make; whether your children go to college, how much you pay in taxes , etc.? When governments take too much of your money, that money is taken from you. It is pulled out of the private economy and your way of life is forever changed regardless of what happens to Scott Peterson or Kobe Bryant.

If your neighbor steals $2,000 from you, you get all excited, want immediate justice. Yes, "Throw the b_____d in jail." However, whenever State governments steal $2,000 from you, you say nothing. I guess it is no fun to talk about the stealing by governments at the water cooler. It takes too much "thinking".

If you rush to your representative to ask them about the surpluses, do you really believe that he/she are going to tell you that there are surpluses? If you do, you live in a dream world. It would be political suicide to say, "Yes, we have excess funds that we are not using."

The State governments have stolen and have in their possession on average $2,149 for every man, woman and child in the U.S.A. That is $8,596 for a family of 4. These are funds that they are not using; and often they ask for more. They surely are not going to openly tell you about these funds. Remember, these are only State governments. It does not include school districts, cities, or counties which also have huge surpluses..

First Problem

You have heard of the budget. You think this is the financial condition of the government. This is false. The budget is only a part of the total financial activities of the government.

Budgets are planning and monitoring documents. Companies prepare a budget. Governments prepare a budget. Companies prepare an annual financial statement of the total financial condition of the company based on what actually happened. Governments also prepare an annual financial statement of all of their financial activities of what actually happened. It is called the Comprehensive Annual Financial Report (CAFR). It is prepared annually.

The CAFR is prepared under the accounting and reporting standards outlined by the Government Accounting Standards Board (GASB). It is an audited report. The CAFR has four parts:

1. Governmental Funds

2. Propriety Funds

3. Fiduciary Funds

4. Component Units

The budget you hear about involves primarily the Governmental Funds. The other three major categories are not included in the budget and this is in most cases where most of the surpluses are located.

Second Problem

Even in the items that are part of the budget (Governmental Funds) there are surpluses they are not telling you about. Here is how it works. A proper budget is made up of three parts: 1) Balance brought forward from previous year's revenues not spent; 2) Current projected revenues; and 3) Current projected expenditures. The budget is Items 1 and 2 minus Item 3. It is just that simple.

However, in the governments' budget process, they forget about Item 1. Money available and not spent in previous years is not included in the budget. There is a reason they purposely and conveniently left Item 1 out of the budget process. In accounting, during the fiscal year, revenues are called revenue in the income and expense statements. However, at the end of the year, everything goes to a balance sheet. When this happens any unspent revenue is converted to cash and investments, no longer called revenue. The budgets of almost all governments now state that current projected revenues will be matched against current projected expenses. They conveniently left out prior years revenues not spent (Item 1) in the process.

Third Problem

The next budget flaw is that the budget process does not take the process to zero. The proper method is called Zero-based budgeting. Here is how it works: If you have projected expenses of $100 you find projected revenue of $100 to cover the projected expenses. However, governments may have $150 in revenues for $100 in expenses. This causes a projected balance of $50 of money that is probably not going to be spent. They do not reduce the projected revenues by $50 to match the budgeted expenses to have a zero balance.

The State of Oklahoma in its FY 2003 CAFR stated that it is going to start using Zero-based budgeting in the budget process. This is the only State I know that is starting to use part of proper budgeting. I may have had a hand in their decision because I have been advocating this for two years. All governors and State legislatures have read my reports. Their voters are continually asking them questions about the reports. Hats off to Oklahoma.

Conclusion

In FY 2001, the Cincinnati School District, the City of Cincinnati, and the State of Ohio, had surpluses totalled over $6,000 per person or over $24,000 for a family of 4. Do Americans really make so much money that they just don't care about this $6,000 petty cash?

President Bush prior to 9-11 wanted to jump start the economy by providing about $60 billion in cash refunds. What do you think would happen to the economy if the State governments returned $612 billion to the people? Twelve million jobs would be created, business would flourish, wages would increase dramatically, massive wealth would be created and the total standard of living of everyone would increase substantially.

If the State surpluses were returned to the people in the form of refunds or tax/charges for service fees/assessments/etc. reductions, it would create the greatest economic expansion in the history of the U.S.A. and probably the entire world.

This is why I consider this to be the most important issue in the U.S.A. today. Returning surpluses would dramatically help everyone. Yet, no one seems to care. It is not cool and one has to think about it!

Look for your State in the Individual Reports in the left column of this page. Now go and find out about your school district, city and/or county surpluses. You will be surprised.

If you have any questions, please contact me at this link . I have not bitten anyone in a long time.

 

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