In his Open Mic column “Trickle Up Economics,” Kevin Russell asked: “There isn’t enough money to pay for basic services, they say. Why the hell not, I ask? Where’d all the money go?” Answer: We are victims of a budgetary hoax. There is no shortage of government funding; in fact, there is a huge surplus.
The collective government entities’ (local, state and national) gross earnings from all sources (investment, taxation and enterprise) amounted to $14 trillion for the year 2007. The entire U.S. population’s net income, after direct and indirect taxes, was $5 trillion (out of a gross of $10 trillion). The public sector is far wealthier than the private sector.
Over 87,000 government entities in the United States collectively own and control more investment assets than the entire private sector. Two-thirds of the government’s annual gross income has come from non-tax-sources. Yet only tax sources are advertised in annual budgets, and “budget shortfalls” are trumpeted as the reason for more taxes and more cuts in services.
What we are not shown is the real total income, as contained in the Comprehensive Annual Financial Reports (CAFR) filed by every entity. Even in the CAFR, assets are mislabeled as liabilities in order to hide the truth. Finally, when cornered, bureaucrats claim that the unspent revenues are all in retirement funds. That would make every civil servant a multimillionaire. Smells fishy. What is needed is an independent audit and statistical review of each CAFR.
This scheme for skimming off up to half of public revenues and sending them to Wall Street has been going on since 1951—60 years! As of 1999, cumulative totals of all “liquid” investment assets of local, state and federal government entities in the United States conservatively exceeded $60 trillion. Totals as of 2008 were approaching the $100 trillion mark.
There is a remedy: the profits from this collective ownership, amassed by government, can revert back to the people to pay all government costs, resulting in the phasing out of all taxation.
Pat Palmer is a meditation instructor from Sebastopol with an MBA in taxation.