America’s state and local governments are sitting on a hidden fiscal crisis. Under today’s official accounting rules, hundreds of billions of dollars in underfunded pension promises are not reflected as liabilities in the budgetary fund statements used for budgeting decisions. The result? Distorted budgets, squeezed funding for schools, roads, and public safety, and a massive transfer of costs to future generations.

The I-64 Bridge in Illinois has a pothole so large that the road beneath it is visible. It was almost hit by a semi-trailer. This is extremely dangerous, putting lives at risk. 

And it highlights the results of poor infrastructure asset management in the audited financial reports, which directly ties to what our friend David Draine at the Pew Charitable Trusts is working on. 

Adam Smith warned us about one “juggling trick”: governments printing money to pay their debts. As Thomas Savidge explained so clearly in his latest article, that trick lets politicians enjoy today’s spending while shifting tomorrow’s pain onto future taxpayers and currency holders. It blurs the bright line between fiscal and monetary policy, erodes public wealth, and has doomed empires from Rome to Argentina.

Yet Smith’s “juggling trick” has an equally deceptive companion: the federal government’s own accounting and reporting rules.

Truth in Accounting’s analysis of the most recent audited Financial Report of the U.S. Government found its overall financial condition worsened by $11.6 trillion in 2025.

Each year, states like Louisiana undergo a Single Audit to verify proper use of federal funds. These audits assess internal controls, compliance with requirements, and safeguards against misuse, with special focus on major programs.

Florida's most recent Single Audit—which reviews compliance with federal grant requirements—raises red flags about the management of substantial federal dollars allocated to public health programs.

Undercover journalist Nick Shirley just released a bombshell 40-minute video exposing over $170 million in fraud across California, including fake daycares and abandoned hospices where fraudsters are living in luxury with zero consequences. As he put it: “Minnesota was big, but California is even bigger.” The fraudsters have been defrauding hardworking taxpayers for years, enabled by weak oversight and bad policies.

On January 30, when former Federal Reserve board member Kevin Warsh was nominated by President Trump as the central bank’s next chair, markets sold off and gold and silver plunged. Investors were positioned for a “dove,” someone inclined to cut rates aggressively and keep money loose; and Warsh has a long-standing reputation as a “hawk.” 

4 Myths About Social Security You Shouldn’t Believe

Your hard-earned tax dollars aren't just being mismanaged; they're being systematically stolen, thanks to a flawed government accounting system that buries red flags under layers of opacity. For years, states have been handing out federal funds through programs designed to feed children, support the vulnerable, and aid during crises. But instead of helping those in need, these programs have become playgrounds for fraudsters, with billions vanishing into luxury lifestyles and offshore accounts. The worst part? These scandals aren't surprises. They've been flagged repeatedly in mandatory state Single Audit reports, documents that auditors, lawmakers, and the federal government obviously ignore.