**Note: We are republishing each of the 22 challenges from Catherine’s fiscal cliff article – one a week. Helps to digest them bit by bit!**
Challenge #4 On and Off Budget
By Catherine Austin Fitts
Assets, revenues and expenses can be accounted for on-budget or off-budget, or simply not accounted for at all. Decisions as to what is on and off-budget are often crafted in a way that is not in the best interests of the citizenry. Rather, they are designed to benefit insiders at the expense of everyone else.
Let’s look at some examples:
- The government’s cost of waging war is on budget. But, the assets acquired in those wars are preserved for the benefit of insiders, often through local “agents” that outsource and “privatize,” joint venture or simply function as puppets.
- Policies and regulations are crafted to transfer benefits to insiders while transferring (externalizing) liabilities to the taxpayers. We can see the results of this process in increasing health care and unemployment costs, for example.
- Trillions of dollars that have been used for bank bailouts are off budget or engineered with FDIC insurance, Fannie and Freddie takeovers, FHA insurance and the Federal Reserve actions that ultimately result in the expense coming back on the budget and in turn being subsidized by the citizenry (see Bailout ‘Mo Money). To add insult to injury, the resulting bank profits are only lightly taxed while bonuses are increased.
- The government funded the space program for decades and paid defense contractors trillions to learn and acquire all the technology involved. Now that we are ready to proceed with energy and mining projects in space, space exploration is being privatized. So the benefits of valuable IP that was paid for by the taxpayer will now accrue to these corporations.
Essentially, the U.S. federal budget is designed to absorb liabilities (risk and expense) into the public sector while transferring assets to the private sector. This imbalance must be addressed to make the federal budget and finances economically viable.
Globally, the process of “piratization” is pushing federal finances in the opposite direction from accountability and viability – see my popular blog post, “Financial Coup d’ Etat”.
Currently, there is no political process to facilitate fiscal responsibility, short of war, wholesale tax revolt or collapse.
