Do We Really Know What The Government is Spending?

In Finance, Politics

I was trolling thru Reddit the other day and came across a very interesting article about military spending.  Whenever “we the people” talk about government spending, one of the hot-button subjects is military spending.  Many people believe that the top spending category by the government is our defense budget.  Personally, I say that that is second to entitlement payments for things like Social Security and Medicare.

I WILL admit that we spend an absolute fortune on defense every year and this will continue to be our top expenditure until we figure out how to make everyone in the world defend themselves.  According to an article on TheBalance, the budget for the military for fiscal year 2018 is $886 BILLION.

The piece that I read from Reddit, appeared on a site called TruthDig, something that i had not heard of before, but the headline was really interesting to me.  The headline was “The Pentagon Can’t Account for $21 TRILLION (That’s Not a Typo)”.  Any fiscally minded person would be very interested in this, particularly if it’s true.  Within this article, they provided a link to an Inspector General report currently available on the defense.gov site outlining “Army General Fund Adjustments Not Adequately Reported or Supported”.  This is the name of the report from the Inspector General.

Within this report, on page 3, there is a finding that states that in Q3 of fiscal 2015, there was an adjustment made for $2.8 TRILLION and a year-end adjustment of $6.5 TRILLION, also in 2015.  The reasoning behind these adjustments was due to “systemic deficiencies”.  There is a statement here that indicates that over 16,500 records were removed during this third quarter period.  Now the 16,500 records are out of a total of over 1.3 million documents, so from a percentage perspective it’s not a huge number.

The troubling statement in here is that the auditors did not have a proper audit trail in order to fully support these adjustments and that “army management could not rely on the accounting systems when making management and resource decisions”.

Back in December, Forbes published an article on this subject where they outline (at the very beginning) of their article that:

“No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.” ~ Article I, Section 9, Clause 7, The US Constitution

This Inspector General report indicates that the $6.5T in adjustments was made against the budget of the Army, which in 2015 had a budget of $120 Billion.  In the Forbes article, the writers stated that a mere 170 transactions accounted for $2.1 Trillion in unsupported adjustments.  There was no additional information provided about these 170 transactions, or $12.35B per transaction.  Each of these transactions (on average) was equal to over one-tenth of the budget for the army.  This article goes on to indicate that between 1998 and 2015, over $21 Trillion in unsupported adjustments have been made.

A little context here:

  • The total value of the stock market is $30 Trillion.
  • Estimated US GDP for 2018 is $20.1 Trillion.
  • Average US household income is $59,039 per year.  It would take the average US household 355,697,082 years to earn $21T.

This article really got me thinking and upset about just what our government is doing with OUR MONEY.  What many if not most people fail to remember is that when our government taxes us and then spends the money, not only are they supposed to tell us what they are spending this money on, but it’s supposed to in some way benefit our citizens.  Being that our national debt is about $21 Trillion, I personally would really love to know where the hell this money went.  I’d also like to know why there’s nobody outraged about this.

Our annual deficits have driven up our debt and it “feels” to me like the government just has no idea what they are doing and most importantly, they just don’t seem to care.  Now maybe the few people in the government that actually make the decisions about our money can’t really comprehend such massive numbers any more than most of us can, but this crap really has to stop and this must be fully accounted for.

 

 

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