CAFR - Devil in Details
By Late Nite LeRoy
January 25, 2001
Spread sheets put me to sleep. But thank God there are CPA mentalities in this world
who can comb through the boring mess and find crucial details that affect all of us. The
most startling thing I have learned of lately is the intelligent assessment of what is
known as the CAFR, or Comprehensive Annual Financial Report. This is a document that law
requires of all governments, from local cities up to federal level to provide to its
citizens. It spells out in excruciating detail exactly where the money is, past, present
and future.
Spreadsheets for personal use can become large. But for governments, they can be enormous.
There is a debate by two good minds over the semantic issue of whether to use the street
terms "slush fund", "controlled surplus" "second set of
books", "skimming" or other derogatory terminology. I'll ignore that for
the moment and get to the root of the problem that all do agree on. ALL governments in
this country: city, county, state and federal have been accumulating assets well beyond
their needs to operate their obligations responsibly. The proof can only be found reading
through these enormous documents and finding entries in column 2506, row 4902 or such
minutia.
Lies, distortions, evasions and spins.
When hard times hit individuals, they have to scramble to sell off personal assets to make
ends meet. But governments just vote to give themselves a raise via taxes. Don't you wish
we could do the same. The shocking discoveries reported in these 3 web sites raise several
questions. Did they have a right to do it in the first place? And what is to be done with
these massive accumulated assets?
Big picture
Before we debate how to spend this newly discovered treasure, let's get some facts
straight. All the money we use in this country (most other countries are the same) has
been printed and backed with NOTHING. The central bank, Federal Reserve in the US, loans
this money into our economy at interest. Since it would be impossible to pay back more
than 100% of what we borrow, the "national debt" as such becomes an impossible
debt to repay. Hence to use the term "surplus" by the Clinton administration,
was a blatant lie. But here is the devilish detail. Numbers don't lie, but liars
manipulate numbers. For over a hundred year now, governments have been entering the
leftover money at the end of the year not into the "general fund" for next
year's use, but have come up with new titles for the column the money got moved to. This
money then got used for things that would be illegal if used directly from the general
fund. What did they buy? Oh, things like stock in Xerox and other blue chips, land,
foreign stocks and bonds, you get the picture. Now here is the ugly result. The books have
been organized to create this picture: governments have acquired virtually all the wealth
in this country, and the taxpayer has been assigned all the debt back to the Federal
Reserve. Devvy Kidd has pointed this out at her web site that our taxes do NOT pay for
government operation, but just pay the Federal Reserve debt each year. But with this CAFR
discovery, I've come to the startling realization that no government needs to tax us for
anything anymore. No government needs to issue bonds that make taxpayers liable to repay.
Why? Because governments already own massive performing assets.
Walter J. Burien, Jr. makes an intriguing proposal. Since cleaning up this historical mess
would be such an overwhelming task, how about starting with a new set of books that
REQUIRE a government to set aside a fixed percentage of its taxes into an investment
account. If managed conservatively, after 7 or 8 years, the resultant investment would be
generating dividends EXCEEDING what the tax revenue base was to begin with. This would
ELIMINATE all need for taxes at all!
Another suggestion has been made to do essentially the same thing, but require the
specific government to ONLY invest the money back into its own geographic boundaries.
Imagine your own city buying stock in your company to build a gas station on that busy
intersection near you. Hard to comprehend until you realize your city probably already
owns stock in some offshore company that is NOT helping your local economy one iota.
Humans would be nice people if it weren't for greed, selfishness and corruption by evil
minded friends. The free enterprise system is a marvelous concept. God gave us enough
resources to create a wonderful world. There is plenty to go around if we can start
listening to God's guidelines of respecting others and not grabbing it all for ourselves,
or voting in criminals who take it all themselves.
Please bookmark these sites and read as much as you can, even if it's only the
introduction at each site. It will be well worth your time.
http://debtpaymentclub.terrashare.com/govscam.htm
http://www.financialprivacy.com/comprehe.htm
http://www.cafrman.com/
--LateNiteLeroy
(-- now the #1 position on the web's most powerful search engine, Google for "lateniteleroy" --)
You may send LateNite email at: leroy@commutefaster.com
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