Alan Quasha Warns Deficit Too High

admin — Thu, 20 Aug 2009 08:08:03 +0000

In an insightful and timely article written for Forbes.com, Alan Quasha of Quadrant Management expresses more than a little dismay at the state of current finances of the United States government. Quoting Thomas Jefferson, who wrote in a letter in 1802 to his Treasury Secretary, “We might hope to see the finances of the Union as clear and intelligible as a merchant’s books, so that every member of Congress and every man of any mind in the Union should be able to comprehend them, to investigate abuses and consequently to control them.” Quasha points out that Jefferson would be very disappointed indeed at the present state of affairs of the federal government.

Only with tremendous exertion could a comprehensive financial statement including income, balance sheet and cash flow report be published by our government today.

Quasha explains that the Office of Management and Budget prepares the annual budget through the executive branch, while the Congress also determines the budget through the Congressional Budget Office. But these budgets are not comprehensive since they only address cash flow which helps the government recognize whether there was a deficit or surplus.

This type of analysis is certainly useful, but it is not complete. Billions of dollars are spent each year for liabilities which, although not yet due, will be coming due in the future.
The true amount of accrued spending is hardly ever reported. This figure can only be discovered through the perusal of another document which the U.S. Treasury publishes. A hard look at this figure reveals a fact which is shocking; in addition to the fact that the real deficit is consistently underreported, the deficit is dangerously high.

Hedge Crunch Financial » Quadrant Management

Alan Quasha Warns Deficit Too High