Saturday, December 26, 2009

The Big 87654 Repeat S&L Crisis

Francine McKenna (FM) has a 7 December 2009 post at her re: The Auditors about CPAs' performance in the current financial crisis. Read FM's comments about AIG-Goldman Sachs credit default swap (CDS) accounting. My conclusion: Goldman told PriceWaterhouseCoopers (PWC) to have AIG change its CDS accounting and PWC did as instructed. I never called FM's assessment "harsh". Here's links to FM's post: http://retheauditors.com/2009/12/07/they-werent-there-auditors-and-the-financial-crisis/ and my my 13 May 2009 post on AIG-PWC: http://skepticaltexascpa.blogspot.com/2009/05/pricewatergates-waterloo.html.

4 comments:

darkcloud said...

SC -

Just want to wish you a belated Happy Holidays.

DC

Independent Accountant said...

DC:

Thanks. Continue the struggle.

IA

Anonymous said...

Federal War Spending Exceeds State Government Outlays
December 26th, 2009

Via: Public Record: http://pubrecord.org/nation/6376/federal-spending-exceeds-state/

The U.S. spends more for war annually than all state governments combined spend for the health, education, welfare, and safety of 308 million Americans.

Joseph Henchman, director of state projects for the Tax Foundation of Washington, D.C. says the states collected a total of $781 billion in taxes in 2008.

For a rough comparison, according to Wikipedia data, the total budget for defense in fiscal year 2010 will be at least $880 billion and could possibly top $1 trillion. That’s more than all the state governments collect.

Henchman says all American local governments combined (cities, counties, etc.) collect about $500 billion in taxes. Add that to total state tax take and you get over $1.3 trillion. This means Uncle Sam’s Pentagon is sopping up nearly as much money as all state, county, city, and other governmental units spend to run the country.

If the Pentagon figure of $1 trillion is somewhat less than all other taxing authorities, keep in mind the FBI, the various intelligence agencies, the VA, the National Institutes of Health (biological warfare) are also spending on war-related activities.

A question that describes the above and answers itself is: In what area can the Federal government operate where states and cities cannot tread? The answer is: foreign affairs—raising armies, fighting wars, conducting diplomacy, etc. And so Uncle Sam keeps enlarging this area. His emphasis is not on diplomacy, either.

For every buck spent by the State Department, which gets some $50 billion a year, the Pentagon spends $20. As for the Peace Corps, its budget is a paltry $375 million—hardly enough to keep the Pentagon elephant in peanuts.

Nobel Prize economist Joseph Stiglitz and finance authority Linda Bilmes write in their “The Three Trillion Dollar War”(W.W. Norton), “defense spending has been growing as a percentage of discretionary funding (money that is not required to be spent on entitlements like Social Security), from 48 percent in 2000 to 51 percent today. That means that our defense needs are gobbling up a larger share of taxpayers’ money than ever before.”

And they add, “The Pentagon’s budget has increased by more than $600 billion, cumulatively, since we invaded Iraq.” With its 1,000 bases in the U.S. and another 800 bases globally, the U.S. truly has become a “Warfare State.” Today, military-related products account for about one-fourth of total U.S. GDP. This includes 10,000 nuclear weapons. Indeed, the U.S. has lavished $5.5 trillion just on nukes over the past 70 years.

No other nation has anything remotely like this menacing global presence. The Pentagon strengthens its grip by running joint “training” exercises with the military of 110 other nations, including outright dictatorships that suppress internal unrest.

The U.S. spends more on weaponry than the next dozen nations combined and is by far the No. 1 world arms peddler. “The government employs some 6,500 people just to coordinate and administer its arms sales program in conjunction with senior officials at American embassies around the world, who spend most of their ‘diplomatic’ careers working as arms salesmen,” writes Chalmers Johnson in “Blowback: The Costs and Consequences of American Empire(Henry Holt).”

Johnson goes on to say the U.S. military establishment today is “close to being beyond civilian control” and that despite its ability to “deliver death and destruction to any target on earth and expect little in the way of retaliation” it demands more and newer equipment “while the Pentagon now more or less sets its own agenda” and “monopolizes the formulation and conduct of American foreign policy.”

How long will it be before this tyrannical, anti-democratic, colossus that is sucking up as much money for war as all states, counties and cities spend on peace—and which straddles the globe, boosts dictators, and beats the war drums—turns on its own people?

bathmate said...

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Bathmate