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9/7/2010
Bond buyers are worried about issuers' financial conditions but are credit default swaps a more proximate threat? These side bets may be putting pressure on the market but would CDSs exist if municipalities' creditworthiness weren't in question? |
9/7/2010
Readers object to the term 'bankruptcy' when referring to states. These objections are valid as there is no provision for state bankruptcies. But what should we call the financial condition of states being evicted from leased facilities? Let us know. |
9/7/2010
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9/6/2010
Spending skyrockets when government tries to overcome markets. The real estate bubble is an example of the US taxpayer assuming risks the market wouldn't. Now, the Feds will let the market set home prices--a first step towards recovery. |
9/4/2010
The Chicago Tribune is exactly right about Illinois--and ever other state--that bases its pension fund calculation on assumed rates of return that are too high. Now,the pension funds are now selling assets, exacerbating the problem. |
9/3/2010
Recent reports tout GM's initiative to recycle everything and become a 'zero waste' manufacturer. Are foreign governments doing the same thing with US dollars? Are they recycling them through the GM IPO? The current owners are worried. |
9/2/2010
But where's the U.S.A.? Both countries have a plan--India exports brainpower and China manufactures everything--but what is the American stategy? We will eventually run out of borrowing power, what then? |
9/1/2010
Economic recovery depends much on the actions of the Federal Reserve. The Congress set out to trim the Fed's power two years ago but the new financial overhaul bill does the opposite. Let's hope Bernanke has read as much about inflationn as depression. |
9/1/2010
Economic recovery depends much on the Federal Reserve. Two years ago Congress wanted to trim the Fed's powers but, instead, has given Bernanke more powers with financial overhaul. Let's hope that Bernanke has read as much about inflation as depression. |
8/31/2010
Europe is preparing for sovereign insolvencies with plans coming from France and Germany. For US jurists tempted to cite European precedents, here's one that might apply to states in deep financial trouble---the concept of 'orderly insolvency'. |
8/30/2010
Economic competitiveness is dependent of education and the U.S. has been lagging the rest of the emerging world. Now a new system for evaluating teachers is gaining traction. One wonders when a system for judging parental involvement will come forth. |
8/29/2010
Deficit spending is justified by the recession and is thought to be temporary...until the economy comes back. In the 1930's prosperity was 'just around the corner' but never came. Are we under the same delusion in 2010? A financial historian opines. |
8/28/2010
Sunday, August 29, at 8:30 a.m. Truth in Accounting Founder & CEO, Sheila Weinberg, will appear on Fox Chicago Sunday. |
8/28/2010
Citigroup, one of the banks bailed out by the American taxpayer, is advising its customers to drop the dollar in favor of the Chinese renminbi. This aligns the bank with the Chinese government's push to make its money a reserve currency. |
8/27/2010
States are seeking compromises with their workers and teachers over health care funding. Chicago area readers will want to catch IFTA Founder Sheila Weinberg on Fox 32 on Sunday morning at 8:30 a.m. |
8/26/2010
Former Senator Simpson lets his tongue wag but are objections just misdirection by those who want to keep the status quo on Social Security? Simpson's earthy style isn't news and, apparently, neither will the debt panel's Rx until after Nov. 2. |
8/25/2010
Americans have long expected their homes to be a good investment and to provide a nest egg. That may be a thing of the past and have important implications for the U.S. economy. |
8/24/2010
Illinois' pension funds are selling assets to make payments. There are buyers. Since these are real assets, the Illinois situation is different than the federal situation. Social Security's assets consist of government IOUs. Who wants them? |
8/23/2010
Institute's analysis of the state's financial report confirms Illinois financial situation is obscene. |
8/23/2010
Today's Wall Street Journal lists the state budgeting tricks the Institute identified in our 2009 publication The Truth About Balanced Budgets: A Fifty State Study. The report is avalable to download at www.truthinaccounting.org
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8/22/2010
Governing Magazine assesses the preparedness of six big state pension funds. |
8/21/2010
Financial troubles in America's biggest state continue. |
8/20/2010
Social Security has reached the ripe old age of 75. Its troubles are clear but there's little agreement about what to do. Here's a suggestion from Forbes Magazine. |
8/20/2010
Entitlements are the primary long-term challenge to the nation's fiscal health. Social Security's supporters have posted this article on the success of the program. Here's the view of the social justice organization "Social Security Works". |
8/19/2010
The Congressional Budget Office has released its Summer Analysis that shows a total deficit of 9.1% of GDP, second only to last year's 9.9%. That means we've added debt of around 19% of GDP in the last two years. The years pass but the debt remains. |
8/19/2010
The Securities and Exchange Commission has come to a settlement with the State of New Jersey. The SEC charged NJ with selling $26 billion in bonds that did not adequately reveal the real financial condition of the state's underfunded pension funds. |
8/16/2010
Chinese finance officials are diversifying their foreign exchange to currencies other than dollars. Is this a result of the Europeans taking a more realistic stand on deficit spending or simply the wisdom of asset diversification? |
8/16/2010
Public sector pensions aren't the only ones in trouble. New accounting rules are exposing troubles in the private sector, too. Organized labor is seeking a public bailout. |
8/14/2010
Germans have apparently managed their recession more effectively than we have in the U.S. Their rebound in economic growth will help balance national budgets quicker. |
8/13/2010
California pensioneer and Candidate Jerry Brown has generated controversy because no one knows the details of his pension service credit. This is a matter of transparency that may have consequences in November. |
8/12/2010
There is a battle looming between pensioneers and taxpayers. |
8/11/2010
Despite Bernanke's assurances, the Fed has begun printing money to buy the Treasury's debt. Mark this date as the start of a period of inflation. |
8/10/2010
Evidence is growing that government is doing much better than the economy at large. The vast expansion of the federal government over the last decade is fueling boom times in Washington D.C. as the rest of the nation shoulders the effects. |
8/8/2010
For the first time ever, Social security is paying out more than it's taking in. Here's one reason why. |
8/6/2010
Guess what? Medicare will cost more than the current statutorial estimate predicts. This compelled an alternative actuarial report. Fascinating, but truly disappointing that the trustees are apparently not permitted to tell the truth! |
8/5/2010
With all the deficit spending, does inflation or deflation loom? The managers of the world's largest bond fund offer their opinions. |
8/5/2010
Better late than never! |
8/4/2010
Voters in Missouri may understand the costs of a huge new entitlement better than their representatives. They rejected a key provision of the health care reform bill by a convincing margin. |
8/3/2010
The IFTA has extensively reported on the tardiness of state Consolidated Annual Financial Reports. Timely information is essential as the states contend with growing fiscal problems but this story reports that state CIOs' budgets are smaller. |
8/2/2010
Fitch Ratings has launched a new commentary on state finances that is available to anyone. Here's a sample and a link to subscribe |
8/1/2010
Municipalities are facing unprecedented fiscal problems. Here's what New York City is doing--an interesting approach. |
7/31/2010
"Private Solutions in Public Sector Pension Plans" conference |
7/31/2010
View her speech. |
7/30/2010
The Institute's Founder appears on C-Span to recommend FACT-based budgeting. Check it out. |
7/27/2010
In this decidely partisan article on China there are two nuggets. First, the observation that the American savings rate has recovered to about half its long term average. Second, the government's deficit spending is nearly $10 per working hour. |
7/27/2010
US aid operations in Iraq spectacularly fail an audit. If 90% of the money supposed to be spent to rebuild Iraq is missing, where is it? The auditors blame it on 'lax oversight'. Is that a euphemism for theft? |
7/26/2010
Pete Peterson and others are saying that our debt to GDP is 60%. Others say the ratio is 90% to 100%. Neither one is right. |
7/25/2010
Teachers have somethng to worry about in Oklahoma--their pensions. Sheila Weinberg and the IFTA have recently analyzed OK and found some conflicts in the funds' valuations. |
7/24/2010
The founder of the Peter G. Peterson Foundation, oft quoted here, gives is view on the US debt situation. |
7/23/2010
After Health Care and Financial Reform, the majority wanted a carbon tax as a 'conservation measure'. They have now given up on the measure, blaming the minority. Didn't they said that Health Care and Financial Reform were dead too? |
7/23/2010
Here's an interesting story about three city employees in Bell California that were fired for salaries that were very high. |
7/22/2010
According to this report from Reuters, the bailout has cost the U.S. some $3.7 trillion, so far. These costs are showing up in the national debt but the estimate doesn't include the new costs health care or financial reform will bring. |
7/21/2010
Maine has a public pension system one legislator calls 'immoral'. It's unsustainable so the state is looking into using Social Security. Seems like going from one scheme to another and watch for benefits to be paid to retirees who haven't paid much in.
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7/20/2010
Energy is a proxy for economic output. China is now using more energy than the US in another sign of China's growing economic power. But the reason may be more due to the differences in the two economies' efficiencies. |
7/19/2010
For years, public pension systems have assumed their investments would earn between 7-8%. Growing evidence shows that the assumption is too high. If so, these pension systems are further under water than previously thought. |
7/18/2010
On the heels of the expanded regulation of U.S. banks, the Bank for International Settlements, in Basel, Switzerland, is bringing out its own set of capital requirements. One wonders if they will apply to Fannie or Freddie; our new law missed both. |
7/16/2010
California's pension costs have been rising at a 38% annual compound rate over the last decade. Willie Brown, one of California's most powerful politicians, was the architect of much of this distress. According to The WSJ's John Fund, he's repented. |
7/15/2010
The Fed's Plan isn't working. Is it possible that uncertainty, not the lack of liquidity, is the problem with the economy? If so, is what used to be called 'pump priming' just inflationary? |
7/14/2010
A Bloomberg survey says that four of five Americans think the Financial Reform Bill will not make the financial markets safer. Nothing in the bill does anything to reign in Freddie or Fannie--which makes them too big to fail--why? |
7/14/2010
The Institute for Truth in Accounting believes that state budgeting practices often obscure financial conditions more than they reveal. Bill Gates goes much further when speaking to the intelligensia in Aspen, calling state budget systems 'fraudulent'. |
7/12/2010
Founder Sheila Weinberg becomes a radio star in Maine. Hear the audio link embedded in the article. |
7/11/2010
Medicare is the largest unfunded liability of the federal government so any reduction in costs will help. Here's an article about efficiency that should keep the rate of cost growth down. They use techniques as old as Henry Ford. |
7/10/2010
Two views on extending unemployment benefits. On one side, a UGA professor and the Soros-funded Center for American Progress recommend automatic extensions. On the other side is economist Arthur Laffer's contrary view. |
7/9/2010
The Congress hasn't fulfilled its most important responsibility of passing a budget. Instead, the leaders have used the existence of the Budget Commission to abdicate their duty until the Commission reports in December. That's well into next fiscal year. |
7/8/2010
Last week,we published an article from Andy Grove on jobs. Here's an alternative view. |
7/7/2010
The Chinese are not happy with the 'Bilateral Investent Treaty' according to this article. It argues that China has benefitted from ignoring the 'Washington Consensus' on trade, pointing to Latin America which did heed Washington and stagnated. |
7/6/2010
One way of dealing with the nation's public debt is to inflate it away. Monetary officials are more concerned with deflation but other parts of the government may be unleashing the forces of inflation. |
7/5/2010
The dismal news on state finances is disheartening but here's an article from a state government insider that suggests we could learn a lot from the Revolution. |
7/5/2010
It's all a Ponzi scheme. |
7/4/2010
The government takes less money in now, but may save money in the long run. |
7/3/2010
Illinois' Comptroller tells the truth about Illinois' budget problems saying 'we/ve stopped paying our bills'. This will begin to happen in other states. |
7/3/2010
Dan Hynes, Illinois Comptroller, says 'We've stopped paying our bills'. This is the first state of many who will eventually have trouble paying their bills. |
7/3/2010
Comptroller Dan Hynes has expressed his opinion that the state's budget is constitutionally suspect yet kept writing checks to cover them. Now, the General Assembly's profligacy has caught up and Illinois becomes the poster child for fiscal dysfunction. |
7/3/2010
The Congress 'deemed' a budget this past week which allows spending without debate on the fundamentals. From a partisan source but unreported elsewhere. |
7/2/2010
Andy Grove offers his views on creating employment in the U.S. The former Intel chief calls for a 'job centric' environment. |
7/2/2010
How can the country operate without knowing the amount of the huge liabilities associated with these programs? |
7/1/2010
The Government Accounting Standards Board has opined on the nature of state and local government pensions. |
6/30/2010
With apologies to the old 'School House Rock' video of how a Bill Becomes a Law, here's a great example of how a bill becomes laden with pork. When introduced, the original purpose cost $30 billion but the final cost has risen to $70 billion. |
6/30/2010
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6/29/2010
Voters will have a say on the amount public employees should conribute to their pensions. In San Francisco, a proposed amendment to the city charter would require city workers to contribute more to their retirement benefits. |
6/28/2010
Yesterday's news clip reported that the effect of government spending may not be as effective as thought. Now, G20 leaders have pledged to cut their deficit spending. Not too much, though, because they still want Keynesian economics to justify spending. |
6/27/2010
Has Keynesian economics been proven to be an illusion? It holds that government spending has a 'multiplier effect' that has justified spending public money--even when the government doesn't have it. Now it appears the 'multiplier' is a mirage. |
6/23/2010
Here is a helpful place to start for those who want to do their own economic research. Answering a question from a reader, columnist Ed Lotterman provides an informative source. |
6/22/2010
Since the late 1960's, Congress has unified Social Security taxes with other revenues. This has provided a significant source of cash to spend on other things. That gravy train has ended according to thoughtful blogger Bruce Krasting. |
6/21/2010
China will let their currency appreciate against the dollar. The move will probably help avoid a trade spat in the short-term and make US exports more competitive where they vie with Chinese products. No word on whether China itself will open. |
6/21/2010
China's decision to let its yuan rise will keep the raw materials it buys relatively cheaper. This could make it relatively more expensive for US consumers. |
6/20/2010
Time Magazine has a story on the sorry state of the states. What's going on in New Jersey will spread to other states as they face their fiscal truths. |
6/19/2010
States are beginning to admit they cannot pay the pensions they have promised to their employees. Some progress so far but most is balanced on the backs of future workers, not yet hired. While helpful, this isn't enough to stabilize state finances. |
6/18/2010
We've posted stories about the statutory debt limit several times but what is the market limit? It's unlikely that we would have a bond auction where nobody came but, interest rates can rise quickly, Greenspan says. |
6/17/2010
There's a huge debate over the value of Chinese currency which many believe exacerbates the current accounts deficit. Secretary Geithner says the value is impeding economic reforms. Official China vehemently disagrees. |
6/16/2010
When the prices of a company's shares fall to less than $1, stock exchanges often delist them. Fannie and Freddie qualify for delisting and their federal regulator has so ordered. One wonders what effect Fannie's well-documented accounting fraud had. |
6/14/2010
Psychologists tell us that human beings deal with loss in predictable ways. This article, featuring the interesting title Deficit Inferno, suggests that these stages also predict how public officials will come to grips with fiscal deficits. |
6/13/2010
Are municipalities heading for bankruptcy? Investors place low probability on that but this article points out that the incentives to seek protection may begin to outweigh the disadvantages. What's missing here are the effects of accounting deficiencies. |
6/12/2010
Is accounting being used to make this New York State pension transaction look like it actually has an economic purpose? If one borrows from a bank and uses the money to pay back an oustanding loan, has anything really changed? Only in New York. |
6/11/2010
China and the US are at odds over the value of Chinese currency. When it's cheap, we buy more and the balance of trade gets worse. |
6/10/2010
In a move likely to be repeated in the near future, Moody's has downgraded Illinois' debt. Watch for the same thing in a state near you. |
6/9/2010
We've been concerned with the shape of public sector pensions but what's the story in the private sector? Maybe not much better and the Pension Benefit Guaranty Corporation isn't fully funded either. |
6/8/2010
Health care has become the largest single cost in several states. Whether the effect of federal mandates or local generosity, these entitlements are growing faster than other programs. New York is beginning to react and slow growth. |
6/7/2010
The nation's weathiest state isn't immune to the effects of spending more than it is taking in. |
6/3/2010
It is the best of finances and the worst of finances... With apologies to Charles Dickens, the comparison of two Washington DC suburban counties show one in good financial shape and one is a basket case. |
6/2/2010
When Social Security was created, the average life expectancy was less than the retirement age. Since then, we've remarkably extended longevity. One solution for Social Security's fiscal problems is to raise the retirement age. How much is too much? |
6/1/2010
Just as Congress authorizes a public health care system in the US, our nothern neighbors are having second thoughts on theirs. Costs are unmanagable, even though the benefits up there do not measure up to even the lowest standard of care, down here. |
5/31/2010
Armies often prepare to fight the last war. This may be the case in Europe, where central bankers are ever-vigilant to guard against inflation. Policy is designed to arrest inflation but what would happen if the lurking danger is deflation? |
5/29/2010
The Bank for International Settlements blames cash basis accounting as one of the accelerators of the consequences of the real debt the US has piled up. The point is that a 'no confidence' vote by markets will come sooner than anyone thinks. |
5/28/2010
Weak revenue is forcing spending cuts, layoffs and furloughs. But cost-cutting measures may not be enough to keep the town of Antioch's books balanced.The economic climate in California is so bad that many towns are discussing bankruptcy out loud. |
5/27/2010
If inflation occurs when too much money chases too few goods, what's the opposite? If the money supply drops, shouldn't prices drop too? So, if the M3 money supply drops faster than it did in 1929-1931, should we expect price depression? |
5/26/2010
Our credit rating is 'triple A'--for now--but the rating agencies are again threatening to lower it due to deficits and debt. If the score falls, interest rates will rise and the deficit will automatically increase. How many disater warnings do we need? |
5/25/2010
State and local government find themselves in distress because of contracts with their employees. Teachers are a big part of this and here's a story on the controversy. One indicator of the problem may be the six hour 57 and one half minute work day. |
5/24/2010
The French are set to help solve their social insurance problems by raising the retirement age from 60 years to a new age. Intense speculation surrounds the decision. Raising the Social Security Retirement age is one solution for the U.S. problem, too. |
5/23/2010
The Social Democratic model that Europe has enjoyed since the end of the Second World War is feeling the strains of economic realities. The American economy may face the same challenges sooner than we think given the size of federal and state obligations. |
5/22/2010
Errors, misunderstandings & wishful thinking are piling hidden new costs onto New York’s public pension system every year, worsening the state’s current fiscal crisis. And the problem is not just in New York. |
5/21/2010
Beijing has published the remarks of GWU Professor David Shambaugh who believes that China should be treated with 'true equity'. Overall, he's optimistic on Sino-American relations. |
5/20/2010
Short term interest rates are very low and in response, the Treasury has shortened the maturities on the nation's debt. That means the debt must be rolled over, frequently. We are in peril if the rates must be raised to sell the new paper. |
5/19/2010
Senator Kohl of Wisconsin proposes that only a few 'tweaks' are required to fix Social Security. |
5/18/2010
The continuing saga of the demise of European social policy and associated politics is manifesting in the value of the Euro. That's good news for the dollar but as Angela Merkel says, it just buys time. |
5/18/2010
State has not issued the financial statements for FYE 6/30/09 |
5/18/2010
On Monday it was $12,974,895,930,216.56. |
5/17/2010
The Greek crisis is threatening to spread. Angela Merkel thinks the bail out is only a stop-gap measure unlikely to solve the problem. Will it spread? |
5/17/2010
"We need mathematicians in Springfield," said Gov. Pat Quinn at a recent speech before fellow Democrats in Winnetka, Ill. |
5/17/2010
"We need mathematicians in Springfield," said Gov. Pat Quinn at a recent speech before fellow Democrats in Winnetka, Ill. |
5/16/2010
The Germans have some experience bailing out failed socialist states. Their experience with East Germany's problems give weight to their opinions on the PIIGS and what should be done. Moreover, If the EU can't agree, why should the U.S. participate? |
5/15/2010
The president of the Kansas City Federal Reserve Bank has resevations about low interest rates. He's interviewed here but one must ask 'If rates went up, what proportion of short term federal debt would roll into higher rates and what of the budget?' |
5/14/2010
England's Daily Telegraph reports that The Bank Of England finds that Greece's troubles also exist in the USA. They also believe the EU has the same weaknesses as pre-federal America. |
5/13/2010
Portugal's Prime Minister Jose Socrates has noticed the Greek crisis and taken preemptive action. Among the plans are to increase the value added tax by 1% to 21%. Will we soon be seeing an American equivalent for the same reasons? |
5/13/2010
Quotes from Treasury, OMB and CBO about the bogus Trust Funds |
5/12/2010
Defense contractor Northrup has had enough of California and has packed up and moved to Virginia. Here's a story that should be required reading for state legislators considering raising taxes to fill budget gaps. |
5/11/2010
The bail-out of government sponsored enterprises continues with a requested cash infusion that will bring the total to more than $145 Billion. Analysts expect that at least $50 billion more will be needed. |
5/10/2010
Michael Barone analyzes the results of last week's elections in Britain. The take-away may be that many voters have changed their vote to reflect disapproval of the out-of-control spending occuring in both countries. |
5/10/2010
Here are a couple of recent articles featuring information or quotes from Sheila Weinberg, the Institute's founder. |
5/9/2010
Many analysts believe that among the primary causes of the financial meltdown were Fannie and Freddie's business practices. The proposed financial regulation bill does not address these GSE's evident shortcomings. This will cost future taxpayers plenty. |
5/7/2010
GM's recent fib about paying back its TARP debts has moved from accounting to accountability of the company's owners in Washington. |
5/6/2010
The Financial Reform Bill has surprises for consumers. In one little reported feature, the feds will begin collecting consumers' financial transactions and be able to data mine it. This places citizens at the disposal of government, not vice versa |
5/5/2010
Is Los Angeles on the verge of bankruptcy? This article makes the case that it is and point to accounting estimates as a big part of the problem. The authors, including a former mayor, suggest remedies for LA where they think is 'the best place to live'. |
5/4/2010
The agency that guarantees failed private sector pension plans has failed its audit. Citing 'material weakness' in its financial controls, the Pension Benefit Guarantee Corporation gets a qualified opinion from its inspector general. |
5/3/2010
Greeks are preparing for 'violent modernization' as they accept the biggest sovereign bail-out ever. The biggest price will be paid by the public sector where wages will be frozen and pensions cut. Is there a lesson for states coming from Athens? |
5/2/2010
Lehman wasn't bailed out but that path may have been cheaper than cost of administering its bankruptcy. Health care and lawyering are the only two industries that don't have a learning curve which reduces costs as activity increases. |
4/30/2010
See the numerous comments about this comparison.
From: Sheila - This reminds me of the comparison we made of federal accounting and Enron accounting. We will re-post that comparison soon. |
4/29/2010
The Senate will debate the 1.200 page "reform" bill now that the Republicans have dropped their filibuster. Here are the four largest points of contention. Bailouts of 'too big to fail' financial institutions appears to be on both parties' minds. |
4/29/2010
Harrisburg PA is considering a Chapter 9 bankruptcy as a strategy to survive financially. As the financial miasmas in which cities find themselves proceed, bankruptcy is becoming a more likely option. Will states soon ask for their own bankruptcy law? |
4/28/2010
Chairman Bernanke says the budget deficit is on an 'unsustainable path'. Coincidently, the president commissions a blue ribbon commission made mostly of politicians to suggest new taxes the president knows are politically toxic. |
4/28/2010
Clinton says states are playing accounting tricks to balance their budgets. |
4/27/2010
California-and many other states-have accounted for their pension obligations assuming high rates of return. New research questions these calculations,finding the unfunded liabilities much higher than previously thought. Fund managers aren't buying it. |
4/26/2010
Illinois State Rep. Jim Watson has proposed a Fiscal Charter that make a lot of sense for Illinois and other insolvent states. It includes The Truth In Accounting Act that the Institute helped co-author. There's a link to the bill, below. |
4/24/2010
Regulating banks is a central social concern. To ensure banks that are 'too big to fail' don't, bankers have imposed all sorts of rules. Before we push the US system into regulators' hands, we should investigate past regulatory failures, like these. |
4/24/2010
Get used to 'Rebalance' and 'Consolidate' as International Monetary Fund code words for devaluation and higher taxes. The men in black from the IMF usually dispense their advice to third world bankrupts but now they're targeting the US and our friends. |
4/22/2010
Governing Magazine, the journal of record for state and local officials, takes on the VAT tax. |
4/21/2010
Rick Skiba is one of the original supporters of The Institute for Truth In Accounting. When he was called back to his old public agency, we missed him. What he found in the books was shocking and shows the value--and risks--of forensic audits. |
4/21/2010
No sentient person believes the timing of the SEC's suit aginst Goldman Sachs is a coincidence. What's missing is any new regulation of the biggest problem in the financial markets, government sponsored enterprises Fannie Mae and Freddie Mac. Why not? |
4/20/2010
Financial observers are torn over the schadenfreude of bailout beneficiary Goldman-Sachs getting into SEC trouble and the over-reach of federal regulators. This article makes the point that the SEC's legal theory may be a stretch. |
4/19/2010
Chinese editorialists make the point that China is "piling up greenbacks" and believe they should stop. An interesting fact from the article--China has a trade deficit. Hard to believe from this vantage but U.S. policymakers should pay attention. |
4/18/2010
The problem with pensions is no longer a future concern. Illinois has just raised its public retirement age to 67 and capped benefits. That's a good step for 35 years from now but what about the accrued benefits? Here's the flavor of local coverage. |
4/16/2010
Give me your guess on when you think it will reach $13 T. |
4/16/2010
Two reports on the Jobs Bill. As compassionate as it is, distinguished economist and Democrat advisor Larry Summers says the new law may help keep unemployment high. |
4/15/2010
We'll resist the temptation to post a tax story today and post this on on the banks. From the Huffington Post, this speculates that the nation's big banks weren't much better than Bernie Madoff. |
4/14/2010
Washington appears to be counting on higher taxes, including a VAT tax, to pay for its programs. Americans are becoming concerned that taxes are too high now, even before large increases kick in next year. And, we think more of us should pay some taxes. |
4/12/2010
Is Congress in denial? Reports here say that the budget is too painful to put on public display...during an election year. Spending beyond our means is America's greatest challenge. If you want to solve a problem, you first have to acknowledge it exists. |
4/11/2010
Paychecks for municipal workers are rising faster than taxpayers' ability to pay. In the nation's capitol, some teachers will earn as much as $150,000 even as the quality and quantity of high school graduates falls |
4/9/2010
From our vantage, it's almost inconceivable that China would have a trade deficit. The truth is, they buy lots of commodities and with a rising economy, consumer goods. They are probably paying for those imports with their dollar hoard. |
4/9/2010
Here's The Institute's Sheila Weinberg on CBS Channel 2 Chicago's Monsters & Money in the Morning. |
4/8/2010
Using realistic earnings assumptions exposes California's pension problem as far worse than previously reported by the pension funds' managers. California is not alone; other states have similar problems for similar reasons. |
4/7/2010
Almost half of all Americans do not pay income taxes. In 2007, median household income was $50,233. This article reports that a family of four can earn as much as $50,000 and pay no taxes. This would appear to mean nobody pays taxes, on average. :) |
4/6/2010
Earnings announcements required by securities laws upset membes of congress enough for them to call for hearings. The reason? Firms must actually calculate the full, present value effect of new laws. Apparently, Congress does not understand this idea. |
4/6/2010
Earnings announcements required by securities laws upset members of Congress enough for them to call for hearings. The reason? Firms must actually calculate the full, present value effect of new laws. Apparently, Congress does not understand this idea. |
4/5/2010
Conventional wisdom foresees a Value Added Tax. Since it’s regressive, progressives will tinker and politicians will sell influence. If we’re to have a consumption tax, why not the ‘Fair Tax’? Economists say it will grow the US fastest. |
4/4/2010
Exchange rates between the dollar and the Chinese yuan are the subject of great controversy as many believe China is artificially holding its currency's value lower than its intrinsic vaue. Is the Treasury Secretary abbeting this problem by delay? |
4/3/2010
Under the cover of a nuclear summit, Hu Jintao will visit the U.S. next week. More interesting may be any talks he has with treasury officials. |
4/2/2010
China considers a national social security tax to redistribute income. If they do not already redistribute income why do we call them Communist China? |
4/1/2010
A staffer for L.A's mayor says 'Unions have priced themselves out of a job'. Struggling states and cities are renegotiating rich public employee contracts for relief with some success. |
4/1/2010
New All-Time High!!! |
3/31/2010
Here's The Institute's Sheila Weinberg on CBS Channel 2 Chicago's Monsters & Money in the Morning. |
3/30/2010
Desperate states are quickly grabbing cash in ways that signal there's something systemically wrong. Courts are curbing these schemes but the trend is disturbing. |
3/29/2010
Goldman Sachs cynically bet against the greenback after influencing the Feds to get them a better AIG settlement. It's a wager that's proven to be a bad deal for these masters of the universe. |
3/27/2010
For the first time in memory, investors are selling municipal bonds on credit concerns. Also, several private companies sold their debt for better rates than the U.S. government got last week. Are markets 'ahead of the curve' and what's their message? |
3/26/2010
Diminishing interest is U.S. debt is beginning to push rates up, regardless of Bernanke's approach. |
3/25/2010
The Social Security Administration is beginning to cash those IOUs that make up their 'trust funds'. This was not supposed to happen until much later in the decade. Now there's talk of 'strengthening finances'. That sounds like a tax increase. |
3/24/2010
Trillions in local government pensions are changing the primary object of local government from filling potholes to paying pensions. Municipalities can escape these debts by declaring bankruptcy but states cannot. Do we need a new bankruptcy chapter? |
3/22/2010
'Health Care' was sold on reducing US debts. Not likely. Besides cooking the CBO estimate, Congress is salvating over 4 years of taxes without having to provide benefits. Don't believe it? Remember the government's handling of the Social Security trust. |
3/22/2010
Truth In Accounting Issues New Jersey’s “Financial State of the State” |
3/21/2010
National health care advocates are happy to accept the Congressional Budget Office's analysis. But this one is filled with uncertainty and breaks the cardinal accounting rule of matching expenses (6 years) with taxes (10 years). It's budget fraud. |
3/20/2010
Now that the government owns GM, it should be a reliable customer. Not so for tool makers waiting to be paid. These small businesses are now seeking TARP relief to stay afloat. If trickle down economics aren't good, how about trickle down bankruptcy? |
3/19/2010
The federal government's web site is always an amusing visit if it weren't so devastating for the next generation who will have to pay for it. |
3/18/2010
Illinois may be in the worst financial condition of any state. Its politicians have so stretched the definition of what can be constitutionally spent that the state has accumulated a $100 billion debt and will be 47% short on this year's budget. |
3/17/2010
With the state's experience with its own form of public health care, Massachusetts' treasurer says federal aid has propped up the state's plan so Congress could pass a national plan. Tim Cahill fears the plan on the table will 'bankrupt' the USA. |
3/15/2010
Aging infrastructure will be competing with pensions for local tax revenues, soon. Kibitzers at this recent water main break highlight the coming controversy. |
3/13/2010
This eye-opening story from Bloomberg shows that the truth about public pensions is beginning to become evident. Years of neglecting their funding combined with false and misleading assumptions by public officials have brought financial disaster. |
3/12/2010
The Chinese discuss the 'China Model' and reasons for their three decade march from a planned economy to a market-based manufacturing powerhouse. |
3/11/2010
Institute for Truth in Accounting Issues Guide to Honest Budgeting |
3/11/2010
As developed countries ponder their accumulated debts, politicians are looking for ways to pay them. The Economist advises honesty about the sizes of the debt. We couldn't agree more. |
3/10/2010
One of the reasons all three levels of government are in financial trouble can be explained by their payroll costs. Unlike the private sector, they haven't downsized to reflect lower revenues. Worse,states aren't honest about their pension costs. |
3/9/2010
Worried about funding shortfalls, states are increasing pension fund investment risks. Having ignored their fiduciary obligations for years, this strategy reminds one of an embezzler, about to be caught, taking big chances to put the money back. |
3/8/2010
The USPS is trying to drop Saturday deliveries to save cash. Now, some schools are going to four day weeks. Have public institutions just become too expensive? The unfunded costs at the state level are almost entirely due to employee costs and pensions. |
3/7/2010
NIALL FERGUSON suggests imperial collapse may come much more suddenly than many historians imagine. A combination of fiscal deficits and military overstretch suggests that the United States may be the next empire on the precipice.
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3/6/2010
Here's some great news from one of the Institute's friends, Illinois State Rep. Mike Tryon on the Truth in Bugeting Bill. With the Institute's help, Florida legislators are introducing their own version. Hat Tip to The Illinois Observer! |
3/4/2010
Wisconsin representative Paul Ryan hits it exactly right asking how we will pay for the nation's existing entitlements let alone new ones. Our debt clock, nearby, shows the problem. |
3/2/2010
China is debating its economic model and it appears that we can learn something from the world's most dynamic economy. This China Daily editorial's first sentence directly contradicts current U.S. policy. |
3/1/2010
Showing just how much the assumptions matter, CalPERS, the California agency that is one of the largest pension administrators, is considering reducing its earning assumptions. If it does, the amount California taxpayers will have to kick in, skyrockets. |
2/28/2010
Banker Jamie Dimon makes the case that California presents a bigger risk to investors than Greece. Combine his opinion with the data from the recent Pew Center for the States and the perception of financial danger rises exponentially. |
2/27/2010
If you have ever wondered why the Social Security retirement age was set at 65, read on. The Robert J. Meyers, who made the policy has died, after having been eligible for 32 years of Social Security benefits. Meyers was one of the last New Dealers. |
2/26/2010
The CEO of Hara Energy tells Forbes why passing Cap and Trade will help his company. Wouldn't a valuable service sell without the hand of government? Apparently not, GE has entered the business, a sure sign of corporatism. |
2/25/2010
Greece's financial crisis is in full bloom. Banks who once helped hide Greece's fiscal problems have switched sides and are now rooting for default. Has Greece--and its creditors been set up to fail by the bankers? |
2/24/2010
Them's fightin' words for the Institute. On the eve of the health care summit, IBD states the obvious: ten years' of taxes for five years of benefits violates the most basic accounting principle of matching revenues with expenses. Try that with the SEC! |
2/22/2010
The situation in Greece and the Euro is having a negative effect on American markets and the dollar. George Soros says the basis for the euro is "patently flawed". Should we expect him to try to break the euro? |
2/21/2010
The economy is pressing the states' fiscal conditions and the governors do not see recovery as fast as the general economy. They are wary of health care mandates and the local tax increases that will be required to fund them. |
2/20/2010
This article shows why economists often say 'but on the other hand...'. What it misses, however, is that our foreign creditors are not happy with the amount of U.S. debt outstanding. Keeping them invested in treasuries will propel rates upward, faster. |
2/19/2010
Hard on the heels of news that Social Security has just become a net cost to the government, China is beginning to let U.S. debt roll off. With these two sources of federal funding drying up, where will the money to finance U.S. debt come from? |
2/19/2010
Truth in Accounting Act introduced in Illinois |
2/18/2010
Social Security has now gone into the red. According to this blog, the system now pays out more than it is taking in. This tipping point comes much earlier that the government previously reported. Social Security is now a net loser for the Treasury. |
2/18/2010
Institute Issues Revised Illinois' Financial State of the State. |
2/17/2010
Now that most of the banks have repaid their bailouts at a profit to the government, one wonders how much trouble they were in in the first place. |
2/15/2010
Here at the Institute, we're concerned with transparency in government. Here's the story of one reporter's battle to find out what's happening at the Fed. It shows how bureaucrats regularly ignore Freedom of Information Act (FOIA) requests. |
2/14/2010
In every crisis, one finds winners and losers. In the Greek melt-down, we find U.S. bail-out winner, Goldman Sachs, at the center of controversy, once again. |
2/12/2010
"Domination of the FASAB process by federal members is incompatible with board independence," says former board chair and one other member. |
2/11/2010
While campaigning, the president repeatedly promised no new taxes for those making less than $250K. Now in the big chair, he's become |
2/10/2010
Newsweek's Evan Thomas writes about Obama'a 'other deficit' and advises telling the truth about deficits. Thomas might want to take a look at the real debt clock, shown above, and recommend telling the whole truth. |
2/9/2010
The unlimited guarantees are supporting the two government sponsored entities. There is no evident exit strategy. |
2/8/2010
Treasury Secretary Geithner's prediction that our bond rating will remain AAA is based on...what? The warning from Moody's is bad enough, contradicting the ratings agency seems foolhardy. |
2/7/2010
The Greeks are attracting blame for threatening the Euro after revealing their annual deficit will be 12% of GDP, not the 4% previously reported. Wait! Isn't that about the same thing we're doing here? 51% of Greece's budget are public wages and pensions. |
2/5/2010
There were 20,000 fewer jobs available in January yet unemployment went down to 9.7%. This mathematical curiosity is actually signaling that many workers have not only exhausted unemployment benefits but, just as importantly, their hope of finding work. |
2/4/2010
The Labor Department needs to tell us the truth about unemployment numbers. Their accounting seems to be based on an active imagination, pulling numbers out of their hat,according to this article. |
2/3/2010
Heather Wilhelm, one of our favorite commentators, on David Walker, the crush of debt facing the U.S. and the president's budget. |
2/2/2010
The president's proposed budget is fully one-quarter of GDP or 22% more than the 40 year average. If classic pump priming works, we should soon enjoy a roaring economy. If not, our kids will pay. |
2/1/2010
The Administration has proposed a budget that spends $1.6 Trillion more than it receives in revenues. If that's not bad enough, the Feds are busy running up unfunded liabilities for entitlements. |
1/31/2010
The president announced spending freezes at the State of the Union address but are they meaningful? By exempting entitlements, the major source of our mushrooming debt remains unchecked. |
1/31/2010
How can you determine if your government's budget is truly balanced? |
1/30/2010
Sheila Weinberg discusses the concerns of the Institute during an interview by NOCW. |
1/29/2010
The best reason to eschew debt is to avoid making our chldren pay our bills. Here's a neat explanation of governments' burden in terms of generational accounting. |
1/28/2010
The president's plan to freeze some spending deserves a closer look. Having substantially raised spending on purposes that aren't recession-related, he proposes to now freeze them at their new, higher levels. US debt will surely increase, as a result. |
1/27/2010
Open-ended entitlements for individuals or government sponsored entities go a long way to explain why the US has $74 trillion in obligations. Here's the story on Fannie Mae which now enjoys the unlimited support of the Treasury...which means taxpayers. |
1/26/2010
Apparently unable to control the Federal Funds rate as a consequence of the huge amount of cash that's been injected into the US economy, the Fed is considering a new benchmark. What happened to the notion of |
1/26/2010
David M. Walker, former Comptroller General of the U.S. book discussion "Comeback America," Union League of Chicago, February 8, 2010, 11:30 Luncheon. Institute for Truth in Accounting as Event Partner. |
1/25/2010
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1/25/2010
Does the federal government owe our seniors the Social Security and Medicare benefits they have been promised? |
1/25/2010
Aerica's debt problem is one we must face immediately and a commission to develop a strategy is a good idea. To gain widspread support however, it must include views from both parties. This story reports the idea is becoming a unipartisan initiative. |
1/25/2010
Congress will raise the debt limit soon because it is running out of authority to borrow. Here's a very simplified list of debts "subject to the limit". Shouldn't all U.S. debt be subject to the debt limit? |
1/24/2010
Two professors offer 20 reasons why the US economy will not recover shortly...if ever. They blame debt and provide easily understood evidence that a depression is on its way. |
1/23/2010
Union members are more likely to be employed by a government entity than by a private one for the first time in U.S. history. Public sector unions have certainly lifted wages and benefits for their members as many governors are discovering. |
1/22/2010
As Americans worry about a double-dip recession, our Chinese rivals say they have recovered. They are now more concerned with inflation,a problem the American economy will surely face when we turn the corner. This may be a glimpse of our future. |
1/21/2010
Congress will soon raise the debt limit by about 10% to more than $14.3 Trillion. Why isn't there a limit on the size of unfunded liabilities? Perhaps more honest accounting would help. |
1/20/2010
With all the hoopla over the Massachusetts election, you may have missed the agreement between congressional Democrats and the White House to create a "Deficit Commission". |
1/18/2010
If you are a regular visitor to our site, you will notice that we've changed the welcoming video. It dramatizes the question of making decisions with all the facts, a practice we should ask our leaders to always take. Watch it all for other new clips! |
1/17/2010
China's Foreign Direct Investment has doubled recently showing the Middle Kingdom is attractive to investors seeking their fortunes. Chinese leaders say this shows the country is well onto recovery. |
1/16/2010
The US still leads in science but, measured by the nationality of PhD graduates, we are training the rest of the world. In addition to debt and trade gaps, do we have a PhD gap and if so, what will it take to keep these bright scholars productive here? |
1/15/2010
Amity Shlaes from the Council on Foreign Relations looks to culture and markets to explain our economic prospects. |
1/14/2010
The administration announces plans to tax big banks to recover the money spent to bail out the financial sector. |
1/13/2010
Review Sheila's future engagements. |
1/12/2010
Do tax cuts and smaller government work to end recessions? Two of our favorite commentors say we are in the same position as we were in 1981, just before the Reagan cuts. Now, we're trying the opposite strategy; what will happen? |
1/11/2010
The 'profits'from bank bailouts are being offset by AIG, automakers and bad real estate loans. Win some, lose some... from Reuters. |
1/9/2010
The states are beginning to line up outside Congress' door. California is the most obvious but Illinois, New York and Arizona may soon follow. Shouldn't all states get in line now to protect their taxpayers from funding other states deficits? |
1/8/2010
Many observers believe that bad commercial real estate loans will be the next heartburn for banks. Not so for D.C. properties....prices and occupancy rates for office buildings are up. Investors seem to be predicting a more expensive government. |
1/7/2010
We believe 2010 will be the year that states replace banks as the organizations with most pressing financial problems. New York is a good example of the looming problem and Gov. Paterson observed that other states have similar problems. |
1/5/2010
Try this. Sit down with a calculator and punch in a 5% growth rate. Multiply 1 by 1.05 then that answer by 1.05. Do it ten times. Then try the same process with 1.07. Quite a difference! Here's an article that re-evaluates 'the aught's' growth. |
1/4/2010
As an Illinois-based organization, we are always interested in local developments. In this story, Illinois shows the way...to bankruptcy through politics? |
1/3/2010
Americans are saving more and if the family in this story is any indication, we are changing our consumption patterns. That's good news for a nation drowning in private and public debt. |
1/2/2010
The Mayo Clinic has stopped taking national health care, that is Medicare, patients at its location in Phoenix because the government doesn't cover the direct costs of providing health care. Little wonder--Medicare is $38 Trillion in the hole. |
1/1/2010
New York State's general Fund ended in the red for the first time in history. Now the state's anchoring the Atlantic and the Pacific are essentially bankrupt. These,and other states with similar troubles, will be the story of 2010. |
12/31/2009
The Treasury has injected another $3.8 Billion in exchange for majority control. It's a consequence of failing to raise $9.1 in new equity after this fall's stress tests of troubled financial institutions. Is this more deficits for our kids to bear? |
12/30/2009
With apologies to Charles Dickens, are state and municipal financial troubles in our future? Can they be avoided like Scrooge avoided his by governments and public employee unions changing their ways? |
12/29/2009
The Congressional Budget Office says the health care legislation passed by the Senate double counts savings. The trouble seems to be the government is able to choose situational accounting rules. |
12/29/2009
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12/28/2009
Another example of the premiere banking firm's firm control of government. This time it's tax- free bonds to build a new HQ building near "Ground Zero". Interestingly, The New York Times reports Goldman's name will not adorn the structure. |
12/27/2009
Hedge fund manager Andy Kessler's different view on how to spend--or maybe invest--in our future. |
12/26/2009
Fresh from raising salaries at these government owned entities, the Treasury announces unlimited bailouts. Are the TARP funds returned by banks facing salary caps financing this? |
12/25/2009
During this season for giving, we are thankful for the gifts we have received from our visitors, volunteers and contributors. Thank you for your attention, time and the resources that are propelling the Institute into a new force for truth. |
12/24/2009
Fannie and Freddie disclosed they have raised their CEO's pay packages. How are they different than the private companies who have to deal with the Pay Czar? Maybe if these two had pay restrictions, they would pay back the taxpayer's bailouts, too.
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12/23/2009
America's debt crisis is largely due to entitlements. Medicare is the largest of these and among its largest costs are caring for very elderly and terminal patients with only days or months to live. |
12/22/2009
A face-saving article on China's role at Copenhagen. This article suggests western media didn't do the job it's expected to do. In the long-run, did China act rationally and do the planet a favor? |
12/21/2009
The key seems to be reducing payments by at least 20%. Better asset performance should help TARP recipients survive--and pay down the debts they owe US taxpayers. |
12/20/2009
The meeting ended on Friday in chaos. Here's what the conferees did manage to agree on. |
12/19/2009
Steve Cook, a CPA in Texas reports that the FASAB has issued requirements that the Federal Government report its financial condition truthfully. |
12/17/2009
The Federal Government is out of control when it comes to spending. They seem to be spending in the same way one would just before declaring bankruptcy. |
12/16/2009
GM and Chrysler tried to reduce their dealer network for years only to be stymied by state politicians. The bankruptcy and takeover by the feds allowed the companies to downsize their networks. Now, federal politicians are resuscitating closed dealers. |
12/16/2009
27,280 unique visitors went to truthin2010.org yesterday |
12/15/2009
Here's the Lewin Group's analysis of the plan passed by the House and the plan on which the Senate will soon approve. From the Peterson Foundation. |
12/14/2009
Poor countries are pushing the concept of climate reparations under which developed countries owe the undeveloped world very large payments. This may explain the third world's appearance in Copenhagen...and why they walked out momentarily. |
12/13/2009
The Chinese are enjoying a surging economy. The fact that imports are up is good news for the rest of the world but, what are they importing? One answer is western car companies--like Hummer and SAAB--a bigger version of 'cash for clunkers'. |
12/12/2009
One enduring theme in the health care debate is digitization and here's a story about one entrepreneur on the front line of electronic medical records. He offers insight and wisdom we should consider as health care is reformed. |
12/10/2009
Each year, Americans export about 1-1.5% of the country's wealth to those countries willing to make products and services for us. The weaker dollar is improving exporters' prospects but overall, our trade position is dismal. Then, there's the debt.... |
12/8/2009
The pension and other post-employment benefits promised to public employees are sinking many jurisdictions. Should employees help fund their own pensions? The comments this article received are well worth reading. |
12/7/2009
The Treasury now says it will lose $42 billion on the $370 spent on bailouts. On the other hand, new loans may lose $100 billion. At best, that's an 11% loss. By the way, Kuwait announced it's made a 37% profit on its Citibank rescue. |
12/6/2009
One of the best on the dollar's situation with an excellent historical seasoning. Just the thing for a Sunday afternoon. |
12/5/2009
Is Illinois Comptroller Hynes acting prudently or politically in denying permission for the governor to borrow another $500 million? This is a decision that will be coming to many states. |
12/3/2009
White House job summiteers should tell the president that they hire when doing so will create profits. With Cap&Trade, Health Reform and Card Check costs looming and anti-business rhetoric foreshadowing more employment costs, new hires will stay rare. |
12/2/2009
The economic meltdown has put extraordinary demands on the Fed. Some see this is as mission expansion and that demands an audit of the Fed's activities. Here's an alternative view from Forbes. |
11/30/2009
The science behind climate change is basically an accounting task. Each day is an individual transaction and the recording of its temperature aggregates into trends. Now, when scientists want to audit the data, it's not available. A big red flag. |
11/29/2009
While The Institute consistently warns about our debt, others believe it doesn't matter as much as we think. One of these is Paul Krugman and here's a revealing exchange from The Atlantic. |
11/28/2009
The equivalent of printing money in the Mideast is to pump more oil but even that has its limits as Dubai--and world markets--are discovering. From the Canadian Broadcasting Company |
11/27/2009
A state's resources are not infinite. After exhausting every possible budget trick to spend more, eventually, states simply run out of cash. That appears to be the case in New York State which figures it has only $36 million on hand. |
11/24/2009
The accounting used by the supporters of health care 'reform' to estimate costs are shown to be untruthful in this article. Mark Twain had a great description of what's what's exposed here. |
11/23/2009
One Federal Reserve chief described responsible economic behavior as removing the punchbowl just as the party gets going. Low interest rates may be the punch that's being removed. |
11/21/2009
The New York Times reports that 'liberal' economists are reaching consensus on another stimulus plan. Perhaps they will tell us why the first one didn't work, before planning a new one. |
11/20/2009
See Weinberg's appearance on Chicago Tonight |
11/18/2009
Regulators want to raise taxes to get greater penetration of information technologies and broadband. How does that work? |
11/17/2009
As president Obama visits, Chinese bankers explicitly accuse the U.S. of inflating its way out of its debt. |
11/16/2009
A report on the fate of TARP bailouts from The Huffington Post. |
11/15/2009
President Obama is likely to be interrogated like a failing debtor by America's largest creditor. |
11/15/2009
LWV-Barrington Event at Cuba Township Community Room - 28000 West Cuba Road |
11/14/2009
American purchases from China have helped make them an emerging power and the U.S. a debtor nation. In posts today, a look a both factors. |
11/13/2009
As any homeowner with too many obligations knows, debt reduces options. The same is true for nations. |
11/12/2009
A list of the disaster states in the most trouble from The Pew Charitable Trust. |
11/12/2009
The Institute's Sheila Weinberg will make another of her appearances on Chicago's WTTW Channel 11 at 7:00 CST this evening. |
11/11/2009
Given the states' precarious financial positions, many observers wonder why the credit markets are still so easily accessible for the states. That may be changing as California is beginning to discover. |
11/10/2009
The recent actions of the Fed mystify many and the remedy, in their view, is an audit. Every other bank is audited but the Fed is resisting. Here's an academic rationale for the Fed's reticence. |
11/8/2009
Depending on one's perspective, there is plenty of blame for the meltdown. From Forbes, here's an opinion that holds technology was just as much to blame as greed, over-regulation or the CRA. |
11/7/2009
As part of raising the authorization to raise federal debt, some legislators are proposing a new blue ribbon commission on debt. Here are Bruce Bartlett's observations from Forbes. |
11/6/2009
Private sector proponents of climate change agreements stand to profit handsomely if Copenhagen results in a binding agreement. Would they be so interested if the spending wasn't with them? Here's one individual's fight to use public domain tech. |
11/5/2009
Once, at the Road America race track, the extremely rare and exotically expensive McLaren race car was honored. One wag observed that 'all 11 of the eight ever built are here.' Is the same accounting technique in play when counting stimulus jobs? |
11/4/2009
The sixth installment of the series. |
11/4/2009
California has a clever idea--increase withholding amounts but not the underlying taxes. How long until other states adopt this imaginative technique and if the legislatures spend the money, are their budgets still balanced? |
11/3/2009
Where are the hip places to move? If it's for economic opportunity--the primary reason to pull up stakes--the answers are suprising. From Forbes, an assessment of our internal ebb and flow. This has huge implications for state finances. |
11/3/2009
Part Five in the ongoing series from Investor's Business Daily. |
11/2/2009
Federal Reserve Chairman Bernanke comes under attack for fundamental misjudgments in Forbes. |
11/1/2009
Assessing the nation's total liabilities is made more difficult by unforeseeable events. Given the regularity of some bank's failures, perhaps we should explicitly recognize some provision for future financial melt-downs. |
10/31/2009
The popular program certainly jazzed GDP but some believe it simply subsidized sales that would have occured anyway. If so, we paid--or our children will pay--$24,000 per sale the program created according to one source. The White House disagrees. |
10/31/2009
The next installment... |
10/30/2009
Part Three of the economist's views on the realities of health care. |
10/29/2009
Our link to Part Two of Thomas Sowell's thoughts on health care. From Investor's Business Daily |
10/29/2009
US GDP grew at a 3.5% clip in the Third Quarter signalling an end to the recession. But many wonder when jobs will also resume growth. |
10/28/2009
Thomas Sowell, once a Marxist, has written a new book which includes a chapter on medical economics. Investor's Business Daily is serializing it over the next several days and here's part one. We'll link subsequent parts as they appear. |
10/28/2009
The Institute and Sheila are quoted in this story about an initiative to require the federal government to disclose facts about its financial sustainability. |
10/27/2009
Politicians tell us the original stimulus plan was back-end loaded because 2010 is an election year. 'Just wait' they say but that hasn't stopped some from agitating for a second stimulus plan, now. Here's their case from The New York Times. |
10/26/2009
Illinois State AFP Director Joe Calomino appears in The Chicago Daily Observer and points to a problem that is coming to most states. |
10/25/2009
The advocates of dumping the dollar have great conflicts that make it difficult for them. Irwin Stelzer explains. |
10/23/2009
Federal spending is creating new debt that is bumping up against the debt limit. The problem is that Congress only limits a small part of the nation's obligations. The real number is in the upper right corner of this web page. |
10/22/2009
The Federal Reserve has not been audited, an essential function of proper accounting. Support for an audit is growing in Congress and the Institute agrees that one should be conducted now. |
10/21/2009
Paul Volker's financial acumen collides with The White House's vast banking experience. |
10/20/2009
Over the years, initial estimates of the costs of entitlements are almost universally underestimated. We published a similar study--with similar findings--more than a month ago. One exception to this iron rule is the prescription drug benefit. |
10/19/2009
Sheila Weinberg comments on the legislation Gov. Pat Quinn signed Sunday to fully fund the Illinois Monetary Award Program, or MAP. |
10/17/2009
Monetization looks ever more likely as the deficit comes in at $1.4 Trillion. |
10/16/2009
October 15 unique visitors to our website hits 24,455. |
10/16/2009
We've worried about the dollar for a long time but, from The Economist,here's some alternative views. |
10/15/2009
An erudite article from The City Journal that confronts inflation on a moral plane. Long, but worth the read. |
10/15/2009
Watch Video of Truth in Accounting's CEO WTTW's Chicago Tonight. |
10/14/2009
Some thoughts on the declining dollar. |
10/13/2009
The Saudis want compensation for lost revenues due to climate change treaties. |
10/12/2009
According to this analysis, state pension funds will be at 50% funding within a decade. The data we've seen agrees and maybe, sooner. So much for rosy predictions. |
10/11/2009
The FCIC has taken over its 100th failed bank this year. This is the flip side of banks 'too big to fail' and the costs threaten the FDIC's solvency. |
10/10/2009
America's trade deficits have improved. That's good news but the underlying reason is not that we are exporting more, it's that the financial melt-down is forcing us to consume less. |
10/9/2009
The UK Telegraph reports a 'plot' against the dollar. Why is there so much news about the dollar in the foreign press and so little in our domestic news? |
10/9/2009
Tom Hudson, First Business, interviews Mr. Nelson about the current debt and the outlook for the future. |
10/9/2009
Eventful Summer Leads to Busy Fall |
10/8/2009
One of the Institute's main concerns is the value of the dollar. This Wall Street Journal article shows why. |
10/7/2009
Nation's true debt reached more than $71 trillion at the end of the gov't fiscal year. |
10/7/2009
The federal government may be spending more to subsidize moribund hiring. Maybe it should investigate why it's so expensive for small business to hire new workers first. |
10/6/2009
The British press is reporting that the oil states, including Brazil and Russia, are working to replace the dollar in oil transactions. These reports are becoming too prevalent to be ignored and presage an economic disaster for the U.S. |
10/5/2009
When asked how much we spend on defense, many people think about half of our budget goes into that category. Actually, it's just 13%. If you want a quick look at where the other 87% goes, here's the data. |
10/4/2009
We keep an eye on California because it is the canary in the coal mine. It is also the state that reported a good financial condition just two years ago. One wonders just how truthful those reports were. |
10/3/2009
The perception of the Chinese economy may be different than the reality, according to this analyis from The Far East Economic Review. |
10/2/2009
From an unusual source Kid's Today magazine, the story of one company bringing manufacturing back from China and Vietnam. The reasons cited are qualitative rather than cost. |
10/1/2009
Today is the first day of fiscal 2010. While the economy is in tatters, how much is Congress spending on its own operations? Here's an interesting report that shows our legislators continue to grow government at a level far beyond that of the economy's. |
9/30/2009
The lights are on in state capitols as legislators invent new entitlements. This, despite the fact that 49 states are struggling with substantially lower revenues. Only one state had increased revenues--any guess which one? |
9/29/2009
Paul Volker, the Fed Chief who whipped inflation, offers a dark view of the economy and of America, generally. |
9/28/2009
From , here's a shout out to exceptional transparency advocates and their projects. This is a list to save and keep. |
9/28/2009
From The Los Angeles Times salutes transparency heros. This is a clip and save list. |
9/28/2009
The Los Angeles Times salutes several transparency heros. This is a clip and save list. |
9/26/2009
Large banks are likely to book losses that are much higher than ever before. It's tough to pay back the TARP loans when operations lose these staggering amounts. |
9/24/2009
Market Watch distinguishes between private and public pensions. |
9/23/2009
As if the financial meltdown wasn't enough, Option Arm mortgages are about to reset, adding pressure to the already battered residential mortgage markets. |
9/23/2009
According to this article, Americans believe that half the money that flows to the government goes...where? |
9/22/2009
We are already $72.5 trillion in debt. |
9/21/2009
'Electronic medical records' is a big part of health care reform. Here's an article from Baseline, a web site for IT professionals, that illustrates the opportunity to improve medical care with technology. Maybe we should try this, first. |
9/19/2009
Warning! Our deficit will not be $1.8 trillion this year. It will be more than $12 trillion. |
9/19/2009
With rumors that BRIC countries will move to replace the dollar as the world's reserve currency in October, here's an emerging markets' expert opinion on why. |
9/18/2009
A good analysis of the competing interests in the Senate Finance Committee's bill. From the The Washington Post. |
9/16/2009
The first story on the last prescription for the entitlement plan. From The New York Times. |
9/15/2009
Critics of the Federal Reserve will ask for an audit of the bank at a rally today. It will occur at 2:30 at State and Van Buren in Chicago. Sheila Weinberg has been asked to speak at the event. |
9/14/2009
The notion that the financial industry must be much more regulated or it will be nationalized is the elixer the president will prescribe for Wall Street, today. |
9/13/2009
Democrats say they will move on health care--the largest entitlement ever--with or without Republicans. |
9/12/2009
With all the contention over the health care debate, it's easy to forget Cap-and-Trade looms. Senate Republicans have 'disengaged' on the current version according to The Economist this may lead to Cap-and-Trade II. |
9/11/2009
Sheila Weinberg will speak "at the bean" in Millenium Park on Saturday--please join her! |
9/11/2009
The effects of the real estate collapse may not be over, despite encouraging signs in the resale market. |
9/10/2009
An interested party asked me the following questions. |
9/9/2009
Evidence that the recovery will be slow coming as the current 'conventional wisdom' may be the same as it was in 1932. |
9/8/2009
With gold hitting $1,000 and oil rising above $70, confidence in the dollar is falling. Other nations are now agreeing with China that the dollar should be replaced with a synthetic currency. |
9/8/2009
Here's a reference to the Institute's work on state accounting and finances. |
9/7/2009
The Fed is printing money to buy Treasury bonds. This is alaming to the nation's biggest creditors, including China. |
9/6/2009
Yesterday, we presented a national view of America's financial situation from David Walker. Today, Gov. Mitch Daniels of Indiana looks at the states. |
9/5/2009
The Institute's friend, David Walker, is the subject of The Wall Street Journal's weekend interview. |
9/4/2009
Vallejo Califonia's contract with the electrical workers union has been voided in the bankruptcy court. With this precedent, will other hard-pressed cities now start considering filing Chapter 9s? |
9/3/2009
Drugs make up a large portion of the nation's medical costs. Other nations control prices and, in many cases, are the only purchasers. Does the ability to charge higher prices lead to more and better drug development in the US? |
9/2/2009
The residual problems from the banking crisis have yet to be seen according to this opinion. |
9/2/2009
Testimony at the GASB Hearing Recommends Recognizing Accrued Pension Liabilities |
8/31/2009
Wise men and women tell us that past is prologue. The administration recognizes that it's 1937, not 1929, that it should study. |
8/31/2009
The article notes: . . (S)ome outside observers to question the independence of the board. For example, the CEO of the Institute for Truth in Accounting said at an April 2009 FASAB public hearing: “This seems like a form of jury tampering.” |
8/28/2009
The New York Times reports that Americans may be changing their spending habits. This will certainly have an effect on the recovery which are usually led by consumers. |
8/27/2009
With news the FDIC is running out of money, what is the status of banks "in trouble"? From the The Wall Street Jounal |
8/26/2009
A watchdog group concludes that the "Making Home Affordable" money is going to the very lenders who created the real estate crisis. On the other hand, aren't these institutions' customers the people who need the help? |
8/25/2009
Should A Liability Be Reported As a Liability? |
8/25/2009
Next year's census promises some good news for the Sunbelt and bad news for the Rustbelt. |
8/24/2009
There will be no Cost of Living Adjustment in Social Security payments for the first time since they became automatic in the inflation-plagued 1970's. Worse, the bureaucrats have figured out how to actually decrease some folks' benefits. |
8/20/2009
The FY 2009 Deficit won't be as big as was once thought. That means it's bigger than any deficit, by any measure, since World War II. |
8/20/2009
The Institute for Truth in Accounting raises some important questions regarding the leasing of the City of Chicago's parking meters. |
8/19/2009
One of the president's biggest supporters worries about the scale of fiscal stimulus saying we are in 'uncharted territory'. Perhaps he should visit this site where we chart the deficit. |
8/18/2009
In a remarkably pointed article, San Diego's Union Tribune faces facts over California's state pension costs. They are unsustainable and the current systems "has to die". Look for others to follow The Golden State's lead as fiscal reality hits. |
8/17/2009
Here's health care advice from a "progressive" CEO of Whole Foods Markets who seems to have a much less intrusive idea for improving access to health care. |
8/17/2009
The federal take-over of Fannie Mae and Freddie Mac exposes taxpayers to foreseeable losses. These "assets" should appear on the federal balance sheet---along with their liabilities. Here's a Wall Street Journal article on the subject. |
8/16/2009
Here are three recent stories featuring Sheila Weinberg and The IFTA. These stories show the people are beginning to understand the scale of Illinois' fiscal challenges--even if their leaders choose to ignore them. |
8/15/2009
The government's announcement that it will produce a 230 MPG vehicle at its GM investment is good news. But, what are the consequences and will it actually reduce total emissions? |
8/14/2009
Bloomberg has an excellent overview on conditions in some 150 banks that are not "too big to fail". The trouble is almost exclusively due to soured real estate loans and credit card losses. |
8/12/2009
History shows that finanacial institutions with quickly growing assets often find themselves in trouble. Ginnie Mae has quadrupled its assets in less than three years. Is this growth a warning sign? |
8/11/2009
Many wonder what will happen if the U.S.'s creditors stop buying our debt. The Financial Times reports an important test of buyers' sentiment occurs this week as the Treasury plans a $75 Billion auction. |
8/10/2009
Where Will We Get the Money To Pay for the Bail Outs and To Reform Health Care? The Government is printing money, why don't you? |
8/9/2009
Freedom Rings Radio hosted by Kenneth John is a live call-in talk show with guests heard every Monday morning at 9AM CST on WRMN 1410 AM, Elgin, Illinois |
8/8/2009
With all the hulabaloo over the health care meetings, we need to remember the real estate crisis has far larger implications, immediately. The Harvard professor suggests a full recourse mortgage as solution to the real estate problem. |
8/7/2009
Here's another example of why truthful accounting--accurate and timely--is important when making policy. Congress added $2 billion to the Clunkers program yesterday. But are the subsidized buyers buying fuel-efficient cars? Apparently not so much. |
8/7/2009
Watch our new videos on YouTube!!! |
8/5/2009
Nancy R. Mathieson, a new volunteer at the Institute, makes an important point about the original errors in estimating Medicare's costs. They underestimated by a factor of 10. That's an important lesson as we consider health care 'reform'. |
8/5/2009
Nancy R. Mathieson, a new volunteer at the Institute, makes an important point about the original errors in estimating Medicare's costs. They underestimated by a factor of 10. That's an important lesson as we consider health care 'reform'. |
8/4/2009
The New York Times recommends the federal government become involved in curing state budget shortfalls. The Institute's 50 State study revealed state "balanced budgets" are a myth. Fix the accounting first and fiscal problems will diminish. |
8/2/2009
Bailed-out Citigroup owes one of its associates a $100 million bonus earned under contract for his role in last year's oil bubble. Will the "pay czar" allow the oil trader to get his gold? |
8/1/2009
A dispassionate view comes from The Economist, reporting on the dynamics of the health care debate. The polls quoted in the article show that the public sees the issue quite differently than the Congress and the President. |
7/31/2009
Your share of the nation's federal debt increases by $30,000 per person |
7/31/2009
Irwin Stelzer has some thoughts on the possibility America will suffer a 'Lost Decade' like the Japanese economy did after its credit crisis. |
7/30/2009
Arizona is in such dire fiscal condition that it's considering selling its capitol building. One commentor on this story calls the plan 'payday loans for government'! The IFTA's 50 state study found bad accounting to be a big reason for such troubles. |
7/29/2009
As other countries' stimulus plans succeed, they have less use for the "safety" of the dollar, according to Bloomberg. As its price falls, other economies want a say in international finance which is dollar-denominated Two related stories, today. |
7/28/2009
Brian Wesbury and Robert Stein make a powerful case to suspend the "Mark-to-Market" accounting principle, completely. Many believe this policy was a primary contributor to the financial meltdown. |
7/27/2009
The Fed Chairman is usually a mysterious, silent oracle but Bernanke is out developing public confidence by explaining the bank's role. Private sector executives build confidence with audits, not interviews. Bernanke should order an audit, too. |
7/26/2009
Three distinguished observers recommend concentrating the regulation of financial institutions' capital adequacy powers in the Federal Reseve. Didn't the biggest players all become bank holding companies recently? Don't banks own the Fed? |
7/25/2009
The Chicago Tribune's Dennis Byrne quotes the Institute's research in a recent editorial. He concludes the debt Baby Boomers are leaving makes them the 'worst generation'. |
7/24/2009
Ford's mastered the heartburn of cash burn,reporting a quarterly profit. It comes from changes in the company's debt structure rather than from building cars but the company is on the mend. Ford is the only "Big Three" company to refuse a bail-out. |
7/24/2009
Here is how the GAO reported on spending in Mississippi |
7/24/2009
Here is how the GAO reported on spending in Mississippi |
7/23/2009
The Speaker believe the planets are aligned for a health care bill. She's willing to cancel Congress' August recess to take advantage of celestial mechanics. |
7/23/2009
How much financial trouble is your state into? Unfortunately, nobody knows. |
7/22/2009
"Zero Interest Rate Policy" is just one of the factors driving the Dollar to an all-time low. By debasing the currency, it's likely that we are foreclosing our future. |
7/22/2009
"Zero Interest Rate Policy" is just one of the factors driving the Dollar to an all-time low. By debasing the currency, it's likely that we are foreclosing a prosperous future that depends on a dollar that is a solid store of value. |
7/22/2009
Our friend David Walker gives his views on the fiscal prospects of the federal takeover of health care. |
7/21/2009
Taxes are rising at local, state and federal levels. Soon, taxpayers will be subject to higher overall rates than in Britain and France. Democrats are having second thoughts about raising taxes on some Americans to fund health care |
7/20/2009
Americans pay one of the highest coporate tax pass-throughs despite the perception that our rivals pay more. No longer. Also, our trading partners are sending their goods here tariff free but we won't ratify treaties that help our workers. |
7/17/2009
If you think our representatives should read legislation before voting you will be impressed with this $87 Billion proposal. On the lighter side, from The Washington Examiner. |
7/17/2009
Illinois $82.2 Billion in the Hole |
7/16/2009
The Chinese economy is 8% larger this year due to its successful stimulus plan. Why did China's remedy jumpstart their economy while our stimulus plans fell flat? |
7/16/2009
Congressional advocates of national health care were told total costs would rise, not fall, under their plan. The non-partisan Congressional Budget Office is the source of the analysis. |
7/15/2009
Reuters reports the administration is considering a plan to let mortgage delinquents surrender ownership of their properties then rent their homes for several years. Would the banks hold the properties or would they sell them off to investors? |
7/15/2009
The Institute's founder and CEO will appear on Chicago Tonight that clears on WTTW Channel 11 in Chicago. This is a great opportunity to tune into Chicago's "Window To The World". |
7/15/2009
Here's a story on public finances in Illinois and a link to a radio interview with Sheila Weinberg from last Thursday. Issued nine months late, the state's annual financial report shows the Land of Lincoln's condition is dreadful...and getting worse. |
7/13/2009
Here are two articles on the migratory effect of taxes. In New York, it's an argument while in London, it is an example. They say that an example always beats an argument. |
7/11/2009
At the G8 this week in Italy, the Chinese raised questions about the dollar as the world's reserve currency...again. Sooner or later, the rest of the world will begin to believe them. |
7/10/2009
This article appeared earlier this week but is worth a read. It asks what will happen after the the immediate economic crisis subsides. |
7/8/2009
ESA Today reports that the states are diverting stimulus funds from Congress' intended purposes to projects they feel more important. This begs the question of why not lower federal taxes and leave the money with the states in the first place? |
7/7/2009
The Huffington Post reports: Was the recession "misread"or was the information incomplete? If it was the latter, perhaps more truthful accounting would help. |
7/6/2009
G8 members and the rest of the BRIC nations will meet in Italy later this week. Expect the discussion to include replacing the dollar as the world's reserve currency. |
7/6/2009
This story illustrates how state and local pension funds are "cooking the books". In essence, it says if your actuary gives bad news, ignore it and hire a new actuary. |
7/5/2009
Local property owners are asking for assessors to truthfully value their homes and businesses. That's straining local budgets. |
7/3/2009
Stan Liebowitz finds the foreclosure crisis was caused more by borrowers with low equity than by subprime borrowers. This finding should have profound implications for federal policies and the trillions of dollars they are sending to the mortgage markets. |
7/2/2009
CAFE standards have been touted as the way to get "greener" cars on the road and reduce oil imports. Here's an alternative view that holds a gas tax--rather than car prohibition--will allow the domestic producers to survive...and pay back the bailouts. |
7/1/2009
The New York Times reports on the billions in horse trading that went on during the lead-up to the Cap and Trade vote. |
6/30/2009
Two stories from California reveal future battles in states with heavy obligations to state employees and large social welfare systems. California will issue IOUs instead of checks and attempt to tame the public employees' unions. Is your state next? |
6/29/2009
Richard Lorenc's article can be seen here: http://gapersblock.com/mechanics/2009/06/22/chicago-group-reveals-the-trut/ |
6/29/2009
Chinese banks are on a lending spree that threatens their banking system's solvency. The Fitch ratings agency calls the situation an accident waiting to happen. Could it be that Chinese bank regulators may soon be glad that have all those dollars? |
6/28/2009
Bloomberg quotes dollar skeptics. |
6/27/2009
The House passed the Cap and Trade energy taxation scheme with the votes of eight coastal state Republicans. That let 44 Democrats protect their re-election chances in 2010. Some expensive horse-trading, no doubt. |
6/26/2009
The non-partisan, Congressional Budget Office has determined that the long-term spending and tax policies of the government have turned 'explosive'. |
6/25/2009
Congress is helping itself to a huge entitlement via 1,201 pages of fresh legislation. One wonders if any of our representatives have read the entire bill. Here's our hometown paper's take on what looks like a Chicago squeeze play. |
6/24/2009
First he said to "make sub-prime loans". Then, he said "deregulation" had wrecked the credit markets. Now, Representative Frank urges lower underwriting standards for condo loans. As always, he expects taxpayers to stand behind these gyrations. |
6/23/2009
Americans have not been profligate with their credit according to this study. Many carry no ongoing balances and those who do are not drowning in debt. Too bad the federal isn't as prudent. |
6/22/2009
Many blame Credit Rating Agencies (CRAs)as contributors to the financial melt down. The administration seems to have given them a pass in their vast, new regulatory plan. Two articles examine the CRAs role in precipitating the crisis and their futures. |
6/21/2009
A story that's been just below the radar has two scamsters trying to smuggle U.S. bonds into Switzerland. The real news is that it's possible to believe this quantity of bonds might be genuine. |
6/20/2009
Paul Abrahms recommends a national sales tax to pay for social entitlements in The Huffington Post. It resembles the Fair Tax but what about repealing the XVIth Amendment? |
6/19/2009
The proposal to grant the Fed sweeping new powers is not impressing senators in either party. Maybe the secretary should order an audit first, then ask to expand powers. |
6/18/2009
The welfare state is showing its limits and the Golden State wants to hand out less gold. |
6/16/2009
Banks and credit card issuers are cutting deals with their delinquent customers. Perhaps this is where all that missing stimulus money is going. |
6/15/2009
With all the bail-out money sloshing around it's bound to show up in unusual places. |
6/14/2009
The Controller of the Currency and the Chair of the FDIC have very different views on how the financial crisis began. Is this just a turf war between bureaucrats or a genuine sign to slow re-regulation until we understand what to regulate? |
6/13/2009
Our own congressional representative Mark Kirk's remarks on the truthfulness of Congress' numbers. |
6/12/2009
Rising oil prices are not due to existing demand but because of expected demand and because the dollar is falling. This is tempting speculators to buy, forecasting demand to return and prices to skyrocket. The Russians predict $250 per barrel. |
6/11/2009
The inventor of the famous curve weighs in on the likely effect of the vast increase in spending and the money supply. His estimate of unfunded liabilities is much higher that ours. Scary! |
6/10/2009
The administration has caved on its plan to control some |
6/10/2009
Chinese students laughed at Treasury's Geithner when he expressed confidence in the dollar. Here's a fascinating view that the Chinese (and other exporters) have a bigger problem specifically due to their dependence on exports and demographics. |
6/9/2009
The Wall Street Journal asks if Citigroup should be allowed to fail. |
6/8/2009
A blog written by IFTA's founder & CEO appears on Assoc. of Gov't Accounting website. |
6/8/2009
Labor unions are having the same trouble as other defined benefit plans including the Social Security Administration, state and local governments and private entities. One view is that "card check" will enlist new members to fund old members's benefits. |
6/7/2009
Here's a worthwhile video showing the Congress asking questions of the Fed's Inspector General. It's an eye-opener. |
6/7/2009
A recent congressional investigation finds the Fed's Inspector General essentially clueless. |
6/6/2009
China's $790 billion exposure to the US dollar is worrisome. The purchase of IMF bonds would begin to diversify their holdings and start the process of creating special drawing tights as an alternative to the dollar as the world's reserve currency. |
6/5/2009
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6/5/2009
Word is Washington is considering a value added tax to pay for national health care. Canadians are paying a national, General Sales Tax but get low-value health care according to this Canadian reporter. |
6/4/2009
New unemployment claims declined for the third straight week. Nevertheless,Americans are receiving more than $2 trillion in governmental benefits. That's one in every six dollars of GDP. |
6/3/2009
Reuters has two versions of the reception Secretary Geithner got from Chinese economic students when he claimed the dollar would retain its value. |
6/2/2009
The dollar is losing confidence as federal spending and borrowing blossom. The loss of the dollar's status as the world's reserve currency would have dire consequences. |
6/1/2009
Bloomberg reveals the characters who will oversee the once-unthinkable GM bankruptcy and defend the taxpayers' |
5/29/2009
Federal debt per household now reaches nearly $550,000 compared to $120,000 for all private obligations, according to this USA Today article. As usual, excellent graphics. Hat tip to Pete Speer for sending it our way. |
5/28/2009
Although they are historically low, bond interest rates are rising. This may be a sign that purchasers are beginning to worry that the federal government's spending plans will cause inflation. |
5/26/2009
The Orange County Register recommends Chapter 11 for California. We should consider the source because Orange County did declare bankruptcy. |
5/25/2009
Niall Ferguson, author of The Ascent of Money, appeared for the Chicago Council on Global Affairs and predicted increasing foreclosures. Here's some evidence to support that notion from The New York Times. |
5/24/2009
Richard Fisher estimates the nation's unfunded liabilities at $99 trillion, more than 50% greater than IFTA's estimate. He blames the failure, rather than a lack, of regulation and government action. He also reports on the most asked question in China. |
5/21/2009
George Will appears in Investor's Business Daily and identifies a threat to federalism that would certainly be a part of a federal rescue. |
5/21/2009
One reason to give ownership of the car companies to their unions is to fund the retirees' benefits. Why, then, are they also asking for federal help? |
5/20/2009
The Wall Street Journal asks the same question that occured to Sheila Weinberg when she created The Institute for Truth in Accounting in 2002. |
5/19/2009
Economist Edward V. Kennedy outlines several health care reforms that stop short on a British-style rationing system working its way through Washington D.C. |
5/17/2009
Sveral articles and views on American solvency's biggest threat--entitlements. |
5/16/2009
How, then, does he recommend a spending program that requires borrowing ten trillion dollars over the next decade? |
5/15/2009
Health care providers meeting at the White House pledged to realize 30% savings or as much as $700 billion per year. Why haven't they been doing it all along? Peter Orzag, the OMB Chief weighs in. |
5/15/2009
An excellent overview of the foreign holders of U.S. debt from The China Daily. |
5/15/2009
THIS WEEK'S SHOW
Sheila Weinberg
Sunday, May 17th - 8AM - 9AM
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5/13/2009
SSA Trustees report that three of the four funds are already operating at break-even. Congress won't be able to fund current operations with FICA taxes much longer but a better question is what power the IOUs the trustees collected have to pay benefits. |
5/12/2009
Politicians blame the "structural deficit" when raising taxes. But, doesn't the structural deficit exist because government habitually spends more than it takes in? Political irresponsibility leads to fiscal problems, not vice versa |
5/11/2009
Two Possible Nightmare Scenarios. Please let us know what you think. |
5/11/2009
New immigrants seem to want benefits that are provided by the indigenous population. Here's a report from immigration's front lines in California where an election next week will set expectations for what the state should do for its citizens. |
5/10/2009
Americans consumed more then they produced in 2005 but we were once a much thriftier nation. The New York Times reports that our savings rate has turned up just as the government plans huge new deficit spending. |
5/8/2009
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5/8/2009
CNN Money reports Toyota will show its first consolidated loss ever. Here's an overview of conditions in Tokyo...and Detroit where the government and the unions are taking over. |
5/6/2009
Could there be a power failure on the "third rail" of American politics? The Washington Post reports some lawmakers looking at a cure for this entitlement's demographically-challenged future. |
5/5/2009
Hoping to put a few drops back into a federal fiscal bucket that has a large hole in its bottom, the administration proposes to tax corporations' foreign earnings. Business interests see the plan as double taxation and plan to resist. |
5/4/2009
The Boston Globe, facing its own financial problems, reports on widespread pension abuse by public employees in the Bay State. Here are a series of reports that makes one wonder if the same scams occur in other states. |
5/3/2009
As we said Friday, The New York Times is reporting that a successful Chrysler bankruptcy will influence the decisions made at and about GM. |
5/1/2009
Here is a view of the Chrysler Bankruptcy from The Detroit Free Press. They worry that a 30-60 day resolution is "naive". If it only takes two months for Chrysler to emerge, GM will soon follow. |
4/30/2009
In a world of financial derivatives, the second derivative of good economic news is that the bad news is accelerating less quickly. Here's The Wall Street Journal's view. |
4/30/2009
Unique visitors hit an all time high of more than 180,000 in April. |
4/29/2009
The Treasury calculates the nation's official federal debt every day. here is some research to find where it stood on some important dates in history. |
4/28/2009
Market declines have hit almost all of us. What does history tell us about the time it takes for markets to recover? Here's an interesting analysis from The New York Times. |
4/27/2009
There's been much speculation that the Obama Adminstration is "socializing" lots of America. Here are two articles that look at the purpose of socializing pensions and the implications from a conservative and liberal source. |
4/27/2009
How can your state be balancing its budget, but going further into debt? |
4/24/2009
The president berates credit card issuers for making credit more difficult on the one hand while, on the other, advising consumers to cut back on household debt. No wonder economist Larry Summers fell asleep. |
4/22/2009
By any measure, Flint, Michigan is at the epicenter of American industrial decay. Is their plan to survive imaginative, if counter-intuitive, or is it just giving up? |
4/21/2009
Bogle is the founder of the Vanguard family of mutual funds and a supremely qualified observer of the markets. His suggestion advances the notion of a sustainable society. |
4/20/2009
Disputed reports say Chrysler Finance executives turned down $750 million in TARP funds over compensation limits. Could this be less about finance than political coverage for those who will soon force Chapter VII on the automaker? |
4/19/2009
The Institute has long accused governments of using "fuzzy math" to obfuscate their financial condition. Could that tactic be spreading to banks even though they have much stronger accounting principles? |
4/17/2009
It's the worst of times for taxpayers but the best of times for federal subsidies. Here are two stories to illustrate the point. |
4/17/2009
Does this scare you? |
4/15/2009
The Atlantic compares the US financial sector with other debtor nations usually seen hanging around in the International Monetary Fund's lobby. A very disturbing article worthy of reading on tax day. |
4/15/2009
That's for each man, woman and child in the U.S. |
4/14/2009
As if we aren't already spending much more than we are producing, the G-19 has put the touch on the president and the US for another $140 Billion for the IMF.
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4/14/2009
Why don't we receive donations online? |
4/13/2009
China has been a dependable purchaser of US debt but they have recently been net sellers of our obligations. Does this mean higher rates will be necessary to finance the federal government's projected $1.7 deficit? |
4/13/2009
Federal Accounting Standards-Setting Process: Stacked Against the Public |
4/10/2009
If you are behind on you mortgage or if your mortgage is more than the underlying property is worth, the president has a solution. Paying on time or made a proper down payment? You're out of luck. Will this extension extend the real estate crisis? |
4/9/2009
It isn't a pretty picture and it is only getting worse. |
4/9/2009
The Wall Street Journal reports several states plan to coerce more revenues from their citizens as their economies falter. |
4/7/2009
The Union League Club in Chicago was the scene of The Institute for Truth In Accounting’s presentation on the nation’s fiscal condition. Congressman Mark Kirk and PGPF president David Walker joined us. |
4/6/2009
Sheila Weinberg appeared as the featured guest at the Rio Grande Foundation's meeting in New Mexico last week. To promote the event the local radio station had Sheila as a guest and a podcast of that program is available. Have a listen! |
4/6/2009
The Governmental Accounting Standards Board (GASB) has issued an Invitation to Comment (ITC) on Pension Accounting and Financial Reporting. |
4/3/2009
The Financial Accounting Standards Board voted to relax the accounting rule that some say contributed to the financial melt-down. The change is very controversial and an important element to arriving at truthful financial statements. |
4/1/2009
A moment for which accountants live and that bankers may rue occurs on Thursday when the FASB votes 157-e. Be sure to sample readers' comments on the article. |
3/31/2009
What happens when an underwater debtor mails in the keys and the bank says "Return to Sender"? A new phenomenon is that banks are not taking possession of foreclosed real estate. |
3/30/2009
What defines a great depression? Few remember it because if one was 20 years old on "Black Tuesday", they would celebrate their 100th birthday this year. Here are a couple of famous survivors' observations.
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3/29/2009
Barney Frank is the point man in the House of Representatives and certainly controversial. Here's The Boston Globe's reportage on the Boston Congressman's work on the bonus situation. |
3/27/2009
Low oil prices may be evaporating as the industry fails to reinvest. Can producers afford to "Drill here, Drill now" at $50 oil? Economic recovery may create a shortage and much higher prices. |
3/26/2009
PBS's Frontline examines the nation's debt in this excellent documentary. We'd argue that the title should be 60 trillion and counting but it is a start. |
3/26/2009
China is one of America's biggest creditors. Many wonder what would happen to the value of the dollar if China quit buying our debt or if it preferred another currency. Is the Secretary of the Treasury helping undermine the dollar? |
3/25/2009
European Union leaders sound off on the US's call for them to increase their own stimulus spending. They recommend staying the course already set, not more spending. |
3/24/2009
We are often asked about this accounting principle's role in the banking crisis. Here's an opinion from The Wall Street Journal with a catchy title. |
3/23/2009
Forbes reports on the Treasury Secretary's plan to fix the banks' problems. |
3/22/2009
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3/22/2009
While establishing his credentials wwith Brazil's Lula da Silva, the president assured China and "every other investor" to have confidence in US investments. Brazil is the fifth largest holder of US Treasury debt. |
3/20/2009
When the melt-down started, weren't adjustable mortgages blamed? If mortgage rates are now at historic lows, shouldn't some relief be at hand? |
3/19/2009
In the first case of which we are aware, a bankruptcy judge has voided public employee contracts in Vallejo, California. With hourly labor costs in the public sector more than 45% higher than in the private sector, will we see more of this? |
3/18/2009
The Governor continues using political math to balance the budget |
3/17/2009
Treasury Puts the Pedal to the Metal on Borrowing |
3/17/2009
Bail-outs or bankruptcy? Get ready for the next wave of financial troubles in public employee pension funds. |
3/14/2009
Shane Osborne, Nebraska's Treasurer, recommends transparency to the federal government. |
3/13/2009
The New York Times reports the Chinese Premiere is worried about that country's trillion dollar investment in U.S. Treasuries. |
3/12/2009
The Financial Times has an expansive series on this economic system and who is important in its future. |
3/7/2009
Two big public employees unions have pulled out of the coalition to nationalize health care. Health care nationalization would likely increase the nation's unfunded liabilities substantially. |
3/6/2009
The 11th People's Congress is underway. It's a forum Chinese leaders use to set expectations and an event the West should heed. |
3/5/2009
How do we explain this massive amount to our readers? Please submit your ideas. |
3/4/2009
Themes from academics who recently collected their best advice |
3/4/2009
Bloomberg reports Chicago's transit system is in trouble and speculates it will foment another trillion dollar bailout. |
3/3/2009
Underfunded pension plans are not just the states' problems as this survey of our hometown corporations shows. |
3/2/2009
American International Group lost $61.7 billion in the last quarter of 2008. That's a billion dollars evaporating every business day. Why is AIG so important that the Treasury funds it directly? |
3/1/2009
Is the third time the charm? |
2/26/2009
The administration's budget proposal, which promises a huge increase in the current deficit and a raft of unfunded entitlements, will be be funded by higher taxes announced on Wednesday. |
2/24/2009
Or is that Down, Down We Go?
Daily Visitors to Truth in 2008 are increasing at an astronomical rate. Unfortunately, our federal debt is also increasing at an astronomical rate.
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2/23/2009
The Detroit News reports on state fiscal problems. It is interesting that the states in the news--California, Michigan and Illinois--are not among those states in the worst condition. |
2/21/2009
The China Daily has an excellent graphic showing the owners of U.S. obligations. |
2/20/2009
Wonder where all that money we send to China is going? We may be seeing where, this week. |
2/18/2009
The effect of politics on the economics of the bail out according to Holman W.Jenkins |
2/17/2009
For years The Institute for Truth in Accounting has been warning about governmental fiscal meltdowns. Most folks weren't concerned thinking "Why worry, that's years in the future." The future is arriving in trend-setting California, this week. |
2/14/2009
After the F.D.I.C. moves in, what happens to the questionable assets that cause banks to fail? |
2/13/2009
We are constantly asked what China will do about so many U.S. treasury securities they already own and those that will be generated by the stimulus bill. Here's the answer according to The Financial Times. |
2/11/2009
Ever wonder which countries are buying up all the debt the Treasury issues? Here's a list. |
2/9/2009
Economist John Taylor's view of the government's role in the financial crisis. |
2/6/2009
With a trillion dollars being injected into the economy, it's hard to believe we will not have inflation. Nevertheless, some economists think we'll actually experience deflation--here's what might happen. |
2/4/2009
Cynics may say that the two cabinet nominees who dropped out for tax troubles are tax cheats. Perhaps the tax code is the offender. Here's exactly that opinion from The Houston Chronicle |
2/3/2009
China's Economic Observer editorializes that a bright future requires both America and China's participation. Unfortunately, it recognizes the flow of treasuries eastward but not how to reach financial equalibrium. |
2/2/2009
The Financial Times reports that the Obama Administration is planning a big announcement to limit foreclosures and to get banks lending again. |
1/30/2009
The Institute for Truth in Accounting is Here to Help Get Us Out of Our $100 Billion Hole |
1/30/2009
IFTA Founder/CEO to talk about the challenges facing Gov. Quinn with the budget. |
1/29/2009
The Boston Globe publishes graphics that show where the money goes. Only 5% will be spent to infrastructure and most of that won't happen this year. |
1/29/2009
Courts have granted the California governor permission to send workers home without pay. This tactic will sweep the nation if it works. |
1/28/2009
The "Economic Recovery" bill is more deficit spending than stimulus and it will materially raise the public debt. Economist Thomas Sowell holds forth. |
1/27/2009
An interesting historical perspective on the role of cental banks and panics. |
1/26/2009
The president finds it within his power to give states permission to override federal environmental laws. Before the states form the alliance they plan, please check Article II Section 10, which is quoted below. |
1/25/2009
Chinese college graduates have believed that they are entitled to prosperity but are finding that's not the case this year. How long until China decides to invest in itself rather then invest in U.S. debt? It is already happening. |
1/25/2009
Our friend Terry Savage's SunTimes column on Illinois public employees' pension situation |
1/23/2009
The first few pages of the Congressional Budget Office's recent testimony is attached and a link to the entire report is included. An excellent document for drawing a general appreciation for economic conditions and their likely trajectory |
1/22/2009
California is running out of money so the governor ordered furloughs to preserve cash. Public employees are objecting and have filed suit. Trends start in California; stay tuned for similar problems in other states. |
1/19/2009
Clive Crook from The Financial Times has a quartet of suggestions for solving America's fiscal crisis. |
1/19/2009
Clive Crook of The Financial Times provides a quartet of suggestions from a real welfare state with predictable recommendations. |
1/18/2009
After telling banks to accept mortgages from debtors who could not repay, the federal government is now telling banks to use bailout money the same way. Bank CEO John Hope says no to change as do many other bankers. |
1/17/2009
BofA stepped up last year to help calm markets when it purchased Countrywide and Merrill Lynch. Washington backed the transactions but now the bank's hometown newspaper is second-guessing the deal. The Wall Street Journal sees it differently |
1/15/2009
Send $194,400 To Washington Today |
1/13/2009
Years of promises for benefits far in the future and a stock market melt down are challenging governors and mayors. |
1/9/2009
The New York Times reports what many observers worry about: what happens when China stops buying our debt? Markets change quickly and this may be the first sign of a change in China's strategy. |
1/9/2009
Hat Tip to Lt. Col. Larry Felts USAF (Ret.) |
1/8/2009
As Nixon opened China, will it take a liberal Democrat to confront the entitlement problem? |
1/6/2009
New Hampshire Senator Judd Gregg seems to understand the nature of the nation's financial challenges. Here's his advice on the coming stimulus plan. |
1/5/2009
What happened to the plan to make Americans pay their "fair share"? |
12/31/2008
Trends often start in California; here's one that will not be welcome in the rest of the nation. |
12/30/2008
Four chronic diseases and end-of-life treatment entitlements are the primary drivers of growing health care costs. The new administration's designee for health care policy, Tom Daschle, recommends British-style rationing. |
12/29/2008
The Euro will overtake the dollar as the world's reserve currency within five years according to this article's poll of Europeans. |
12/28/2008
Our friend Paul Jacob on the orgy of debt: |
12/27/2008
Fulfilling The Institute for Truth in Accounting's mission requires citizens to have a grasp of financial principles. Here's what Virginia's schools are doing. Take the attached quiz and see of you can find the error! |
12/26/2008
Here's a list of projects that cities and states are pitching to the incoming administration. It's easy to see how we spend more than we have. |
12/23/2008
Reports in today's New York Times say the failed subprime lender improperly accounted for a capital infusion that allowed it to claim "well-capitalized" status...just before it failed. |
12/22/2008
Mortgage applications are keeping lenders busy inspecting applicants' credit more closely, this time. |
12/19/2008
President Bush sends TARP funds to GM and Chrysler. Ford is ok, for now. In three months they must demonstrate "net present value" and account for "all future obligations". We'll see. |
12/15/2008
The New York Times has a few questions for Treasury Secretary-Designate Geithner.
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12/13/2008
Here are the trade figures from October. They are true, but incomplete. Truthful accounting is complete and comparable and would include year-to-date numbers, like private companies produce. Perhaps the government doesn't want us to know! |
12/11/2008
Congressional investigators are looking into Fannie and Freddie but what sort of accounting can we expect? |
12/10/2008
For the first time since 2001, China's exports fell. At the same time, US treasuries sold to yield zero percent. Is there a connection? |
12/9/2008
Car dealers often use "Zero Percent" financing to lure buyers. Now that the government is entering the car business, the technique seems to be spreading to the Treasury. |
12/5/2008
Health care costs are a significant challenge for the economy. Tom Daschle is already being called the "Health Czar" and he's revealing the new adminstration's plans. |
12/4/2008
One of accounting's central concepts is materiality. The banks are getting more than a trillion dollars going to banks without much oversight, is the $25 billion the car companies are asking for even material? |
12/3/2008
Britain's national health rationing system has an answer: about $22,000 for six month's life. If it costs more, the patient is out of luck, according to this article |
12/2/2008
Once, the local telephone company defined financial stability. No longer as news of the telco in Hawaii has filed for bankruptcy. Was it too much debt,bad deal making or cell phones? |
11/25/2008
An article supporting Mark-to-Market accounting from City Journal. |
11/25/2008
Two of our favorites, Brian Wesbury and Robert Stein's take on Obama's picks for the economic team. |
11/24/2008
This morning's news that Citi will get at least $300 Billion reminds us that Robert Rubin has been on the the company's board for several years. Are New York financiers with government ties getting favorable treatment? |
11/22/2008
President-elect Obama pledges 2.5 million new jobs but his advisors predict that won't be enough to overcome the losses the economic melt-down will cause. Maybe the bail-out money might be better spent on jobs. |
11/20/2008
The public sector has long underfunded its pension obligations but private companies have done better. Now, with the financial crisis hurting companies, they want relief from their pension funding responsibilities. |
11/18/2008
Today, the heads of the car companies, already the recipients of $25 billion, are making their case to Congress for more aid. With all the attention focused on Washington, it's easy to forget many states are in financial distress, too. |
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