Opinion: Even conservatives are too liberal on debts

By   /   March 31, 2010  /   1 Comment

BY FRANK KEEGAN, Editor Watchdog.org

A true Tax Freedom Day may never come unless America forces government at all levels to tell us where we really stand.

Only the truth can make us free
If you think this year’s Tax Freedom Day really falls on April 9, as announced Tuesday by the Tax Foundation, avoid your grandchildren.
They — and the way things are going, their children – will not gain tax freedom until every American now alive is long dead. So, let’s party like it’s 2075!
Tax Foundation President Scott Hodge jokingly uttered that date Tuesday during a Web conference when asked what the true date would be if we included deferred costs and taxes.
Sure, we’re working only one day later than last year to pay taxes, and 22 days fewer than in 2000. It is more than we spend on food, clothing and shelter combined.
Yet it is not enough to cover what government at all levels is blowing through.
“We’re only paying for 60 percent of what we’re spending,” Hodge said.
And he said the calculations this year do not include cost increase estimates for President Obama’s expansion of national health care programs.
The fact is, Tax Foundation calculations don’t include a lot of real costs because politicians have hidden them so effectively they don’t even know – or care – what the true tab is. They will be out of office living large at taxpayer expense before the bills come due.
Take a look at just a few reality checks on where we really stand.
According to the U.S. Treasury “Debt to the Penny” real-time clock, we officially owe ourselves and others more than $12.7 trillion, about a year’s worth of our total productivity.
But using standard, accepted accounting principles, The Institute for Truth in Accounting puts it, conservatively, at about $74.5 trillion and growing at about $100,000 a second.
Even that staggering number probably is low, according to Institute President Sheila Weinberg.
It doesn’t include all of the huge, hidden debt of false retirement promises to state and municipal workers because nobody knows what that number is.
Pew Center on the States recently estimated it at $1 trillion, stressing it probably is much larger.
The Government Accountability Office just put out a limited, admittedly lowball estimate for state and local retiree health benefits alone at $530 billion in the hole.
Both those studies used the official deceptive numbers provided by state and local governments, who are allowed to use accounting techniques that would land any average citizen or business executive in prison.
In a more accurate estimate, according to a study this year by economists Robert Novy-Marx and Joshua Rauh, “liabilities across all 50 states amount to $3.21 trillion. This calculation probably understates the liability …. Using zero-coupon Treasury yields … total liabilities are $5.20 trillion. Liabilities are even larger under broader concepts that account for projected salary growth and future service.”
What nobody knows now is how many risky investments they’ve made in desperate attempts to double-down on the bad bets that cost taxpayers and public workers $179 billion in 2008 alone.
Nobody knows the true depth of folly public officials reached in trying to hedge against rising interest rates in the occult world of government debt.
Wait, there’s more and worse.
The true deficit should include cost of public works projects the American Society of Civil Engineers’ Infrastructure Report Card estimates at $2.2 trillion due over the next five years.
An unknown number of states have been deferring costs by “self insuring” instead of paying premiums to real insurance companies.
How many of them have squandered the money instead of investing wisely for the day they must pay claims is another unknown. If nothing bad every again happens anywhere, it will turn out to be a wise financial move.
If something bad does happen, taxpayers are on the hook.
The list, actually, goes on and on in an infinite regression of financial folly.
This is public misfeasance and malfeasance that transcends Republican or Democrat, conservative or liberal.
When even the openly conservative Tax Foundation understates the problem, Americans of all persuasions must understand it is time for truth.
We cannot decide what government should do or cut or delay or accelerate when we don’t even know where we stand. Rules now before the Governmental Accounting Standards Board and bipartisan Truth in Accounting bills now before two legislatures could be first steps in solving our problems.
We are fiscal slaves, chained by lies, indenturing future generations without even knowing it.

Only the truth can set us free.