Sequestration And Rounding Errors

So far I’ve demurred adding to the hype over sequestration. Rest assured that this post will not add to the bloviating but on the Eve of Armageddon I would like to inject a bit of reality into the fury that appears to be swarming through the blogosphere and greater media, though to the credit of the citizenry it appears to be reacting to the onset of spending a bit less money with admirable unconcern.

Specifically, the proposed cuts of $87 billion represent a rounding error. If you accept this bit of rationale then you probably accept the argument that since it’s a blip, all of the hand wringing over lost jobs, the countryside being overrun by felons and GDP cratering have no basis in reality. Now, I recognize that it’s easy to make such a claim but let me throw in one piece of evidence which I think makes a fairly good case for taking all of this with many grains of salt. It comes from the Government Accounting Office.

WASHINGTON (January 17, 2013) – The U.S. Government Accountability Office (GAO) cannot render an opinion on the 2012 consolidated financial statements of the federal government because of widespread material internal control weaknesses, significant uncertainties, and other limitations.

As was the case in 2011, the main obstacles to a GAO opinion on the accrual- based consolidated financial statements were:

• Serious financial management problems at the Department of Defense (DOD) that made its financial statements unauditable.

• The federal government’s inability to adequately account for and reconcile intragovernmental activity and balances between federal agencies.

• The federal government’s ineffective process for preparing the consolidated financial statements.

In other words, these clowns have absolutely no clue as to what they own, what they owe or how much money comes and goes. They just spend it. And we’re supposed to worry about maybe cutting their receipts by 2.5%? Trust me their biggest worry is not going to be whether to fund a needed program, it’s going to be how to keep enough money off the books so they can fund their next conference in Cabo.

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