The Corrupt Company You're Forced to Invest In
Here's a letter to the editor of today's Washington Post:
The largest employer in the world announced on Dec. 15 that it lost about $450 billion in fiscal 2006. Its auditor found that its financial statements were unreliable and that its controls were inadequate for the 10th straight year. On top of that, the entity's total liabilities and unfunded commitments rose to about $50 trillion, up from $20 trillion in just six years.
The "employer" is of course the federal government. The letter was written by the U.S. comptroller general. And unlike, say, Enron or WorldCom, you have no choice but to patronize it, and to continue to fund its waste. I've always wondered why reaction to private sector accounting scandals tends to be pretty visceral, yet facts like those above tend to illicit little more than a chuckle and a shrug. If anything, government books-cooking ought to enrage us quite a bit more, oughtn't it?
And of course, once the public got wind of the accounting scandals at Enron or WorldCom, the companies were finished. The federal government gets to waste hundreds of billions of dollars, lie about its accounting, and generally defraud the public -- then rewards itself by expanding. Consider: The D.C. suburbs are now home to the three wealthiest counties in the country, and four of the top ten. The D.C. metropolitan area has the second highest per capital income in the country, and federal workers not only make twice what their private sector counterparts make , they're also nearly impossible to fire for incompetence.
Hat tip: Don Boudreaux.
