I just got a cool new book (from 1989) in the mail. The Coming Soviet Crash, by Judy Shelton. Written two years before the USSR imploded, Shelton took a close look and warned that USSR government finances were in much worse shape than they appeared on the surface, given deceptive accounting practices.
Consider the first chapter title and headlines, in light of our mission here at Truth in Accounting:
- The Internal Budget Mess
Forever Balanced
Adding up the Numbers
What is the Plug Figure?
Obscuring Reality
The book’s dust cover notes include
“Yet, as Shelton documents, Soviet financial statements contain skillful discrepancies and omissions that disguise the true condition of the internal budget. To increase its total yearly revenue figure to a level that preserves a budget surplus illusion, the Soviet government must issue credits. Those credits, disguised as revenues, are carried in the financial statement as if they represented actual contributions to the budget.”
Here’s a good question or two in the book that we might be asking today in the USA:
“… The question is: Are Soviet authorities themselves aware of the real status of the internal state budget? … the reliance on state credit to balance the budget will continue. In the meantime, we have to wonder, are the Soviet authorities keeping two sets of books?”
Looking forward to a closer read.