Tuesday, May 29, 2012

California Deficit is a Big Lie

Clint Richardson, author of the Reality Blog, and producer of the documentary, Corporation Nation, which exposes the Comprehensive Annual Financial Report (CAFR) - the full accounting of government and its investments...the true source of financial auditing for government that's  never spoken about publicly -in his latest article, reports once again, on "the purposeful omission of massive amounts of wealth by your government". Specifically, Jerry Brown's big lie: that California's deficit is now "$15.7 billion, far greater than the original $9.2 billion estimate in January. (CNN, May 15, 2012)"

The Simple Truth

The State Government of California has $100′s of billions in liquid investments and assets, could easily pay off all of its debt tomorrow, and would have $100′s of billions left over.[...]
Richardson  explains and proves that over $577 billion in investment fund balances aren’t being reported by the California State, (California CAFR) contrary to what Jerry Brown claims in the government's latest propaganda video.
"So… is California in such a financial deficit, as the Governor and his proposed and revised budget plan so matter-of-factly states?

This is the question that we will be answering today. But in order to answer this question, we must go to the true source of financial auditing for government, the Comprehensive Annual Financial Report (CAFR). This report – the full accounting of government and its investments – is virtually never spoken of publicly. It is not mentioned on the nightly news. And it is not referred to when addressing the people about taxpayer issues and budgetary considerations and shortfalls. In short, this CAFR report is the Holy Grail of government accounting; very difficult to read and comprehend, and worse of all… it is hidden in plain sight."
Below, Brown addresses and purposefully lies to the people of California, threatening to cut school funding by multiple billions if the people of the State do not vote in favor of his new budget plan.

Now, the first thing that must be understood is the difference between the partial “budget report” as referred to above by the Governor, and that of the Comprehensive Annual Financial Report – which is the full audit of the California government. The following paragraph is taken directly from the 2011 CAFR report, and explains this difference quite succinctly…

On page 200, the 2011 California State CAFR explains the following (emphasis mine):
“On a budgetary basis, the State’s funds are classified as either governmental cost funds or nongovernmental cost funds. The governmental cost funds include the General Fund, most of the funds that comprise the Transportation Fund, and many other funds that make up the nonmajor governmental funds reported in these financial statements. Governmental cost funds derive their revenue from taxes, licenses, and fees that support the general operations of the State. The appropriations of the budgetary basis governmental cost funds form the annual appropriated budget of the State.

Nongovernmental cost funds consist of funds that derive their receipts from sources other than general and special taxes, licenses, fees, or state revenues and mainly represent the proprietary and fiduciary funds reported in these financial statements. Expenditures of these funds do not represent a cost of government and most of the nongovernmental cost funds are not included in the annual appropriated budget…”
And so we can see that governments participate in many business activities; and we must first and foremost understand that a large portion of liquid investment assets are held within what the government calls “non-governmental” activities, including “Enterprise Operations”. These investment assets are usually kept in what are called “Investment Funds”.

But government is only obligated (by its own law) to report what it refers to as “governmental” or “taxpayer” activities to the citizenry on its “Budget/Appropriations Report”. Tax in… Tax out…

In short, the Governor of the great corporate State of California is lying to his taxpayers through the act of omission of these CAFR facts, by only referring to a hand selected portion of that CAFR, which is called the State’s annual budget report. While this should be tried as perjury, the laws of the State/Federal government protect him from this ever happening.

To help in your understanding, let’s say that you were to have a checking account with $1,000 and a savings account with $10,000 in two different banks, and that you only reported to the government that you had $1,000 dollars as your net worth because you don’t want to use your savings account to pay bills (taxpayer obligations) to government. You’d be audited and put in a federal debtor’s prison. But for government, the simple designation of “non-governmental” or “non-taxpayer” income and investment returns allows them to hide all of this wealth from the people and the “Budget Report”, while never mentioning the funds and wealth in the CAFR report. The only difference is that government does this legally – because government makes its own laws!

Why do they do this?



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