US Agencies Hiding Billions, Trillions While Crying Budget Deficits

… These individuals are national leaders who have communicated how government agencies conceal American taxpayers' money in surplus accounts that collectively total trillions of our dollars. The data is found in government agencies' Comprehensive Annual Financial Reports (CAFRs).

What CAFRs reveal is a communist-style policy whereby the US taxpayers surrender enormous assets to the state, who then "invest" these collective trillions that swell in these accounts. Concurrently, taxpayers are informed of budget deficits to either squeeze more taxes from them and/or cut public services. To add insult to injury, the state lies in omission by never reminding Americans of their hard-earned and withheld trillions as they eliminate jobs, reduce education, and attack the quality of our lives.

The American Constitution is a contract of limited government whereby the public informs and is informed by our representatives. CAFRs are damning public documents that expose "leadership" from Left and Right as exactly what leading economic voices have said: an absolutely corrupt and self-serving oligarchy.

Let's look at the economic data revealed in CAFRs:

For example, California has a budget deficit of ~$20 billion. The combined investments of CAFRs for the state of CA, Los Angeles County, and the City of Los Angeles is over $450 billion; over 22 times the amount of the budget shortfall (documentation page numbers below).

California claims they need this money mainly for public employee retirement benefits. Let's check that story. The CAFR data shows current member contribution pays for all retiree benefits except for $1.8 billion (net cost). If just these three state agencies surrendered their withheld money back to the public instead of lording over it as communists, each Californian would receive ~$15,000. To pay for the shortfall in the retirement account, each individual could be taxed $50. This money is thePeople's money being held in escrow for alleged "pensions", gaining huge amounts of interest. The government will say they need this money forthe pensions of all state workers who get pensions. Yeah, but they're not all going to retire at the same time. They will retire sporadically over many, many years. This money is being unlawfully used. Itis taxpayers' monies that should go to fund government liabilities, balanceALL budgets, and reduce ALL taxes, especiallyALL property taxes by a substantial amount (even down tozero property taxes).

Why has political "leadership" and corporate media not informed American taxpayers of this option and publicly submitted this data for professional and independent economist cost-benefit analysis to provide other options?

The answer to that question is also the answer to the question of how political "leadership" gets away with criminal acts where the public will not force the issue.

So far, we're only considering three CAFRs in the state of California. The comprehensive reality is far more dramatic. If you combine all of California's ~10,000 government agencies' CAFRs, the combined total according to Walter Burien's sampling analysis is $8 Trillion (http://cafr1.com/challenge.html). Let's say Walter's way-off. For argument's sake, let's say the total is less than half; only $3.5 trillion. If that was returned to the public, each Californian would receive $100,000.

The CAFR documentation showsthat every state(and the federal government)has overtaxed and seized Americans' hard-earned money in outrageous sums.

Obviously, we need independent auditing of all state CAFRs (and the federal CAFR)and independent economic cost-benefit analyses to make our choices clear of how the public benefit is best served. Californians oppressed under a $20 billion dollar budget deficit that cuts essential public services while not considering taxpayers' trillions "invested" in our names is among the worst choices imaginable.Not only is itOrwellian, it's criminal!

To put this into an analogy:

This is like a juvenile claiming he needs money because his front pants pocket is empty, which he dutifully shows (budget). What he's not telling you is that his back pockets have over 100 times the money he says he "needs" (shown in various places of the CAFRs). Whenever he's asked about the money in his back pockets, which he never volunteers in discussing his empty front pocket and never invites for consideration to move some into the front pocket, he says, "Oh, that money is designated for other uses. I can't touch that." So far, the silence of corporate media and political leadership from Left and Right has brought us to today. Of course, "I can't touch that" is a lie of omission because it can be touched the moment policy changes. So the real issue is the heart of economics: what are the costs and benefits of different choices?

Here's the specific data and documentation using the California pension system:

California pension and "other" trusts investments total $367 billion. Net pension benefits payable from that $367 billion in 2009 was $1.8 billion (retiree payouts minus current member contributions). Subtracting other liabilities ($48 billion in securities lending obligations that seemed to be borrowed from retirement funds- page 212), the state of California is holding onto over $300 billion of the public's money that could be used for other purposes (pages 48, 49 of the report).

The misleading information on pages 154-155 suggests retirement funds are not fully funded. However: over $300 billion is held in investments for $1.8 billion in net benefits. How many votes do you think our present policy would receive from the California public given the alternative of receiving ~$15,000 now and paying a $50 tax every year.

The investments: $143 billion in "equity securities" (stocks), $92 billion in debt securities (page 83-84). $72 billion is dependent upon foreign markets (page 88).

The UC system had a budget deficit for this ending school year of $0.65 billion. The policy response was to deny 2,300 students enrollment, lay-off over 2,000 faculty and staff, furlough teaching days and cut 10% salaries, and raise tuition by 32%. For less than one-third of one percent of the investment total of California, UC would have been fully-funded and those reductions eliminated.

California's 20,000 laid-off teachers could be rehired at $70,000/year for $3.4 billion; less than 1% of these three CAFR "investments" total.

One cost of this deception: Governor Schwarzenegger announced a 41 percent cut for the 2010 budget in "general government" services including elimination of CALWORKS (welfare to work and child-care program, which will affect 1.4 million people, two thirds of them children), and sharp decreases in health and welfare programs for single mothers, low-income children, foster youth, the disabled, and senior citizens.

Los Angeles County has $52 billion in investments (pages 61-63), the City of Los Angeles has $36 billion (page 80). Both have drastically cut programs. Both have pension plans underfunded by current members by less than 2% of their investment totals.

(http://cafr1.com/)

Bruce Eden

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