REPORTCARD2000.COM
Home Top 10 List Detailed Home Table of Contents Background Analytical Review Current Data Quotes
Contact Discussion Board
“And no one should be surprised, human nature being
what it is, people will go as far as they possibly can get away with.” – Senator Hillary Clinton – D, New York
Why REPORTCARD2000.COM
Was Developed
Since
the late 1990s I have listened to people opine on the causes of the budget
surpluses and subsequent budget deficits.
The comments cover the gambit of possibilities ranging from exquisite
financial management to reckless irresponsible behavior. The 2001 CBO budget projection has been
referenced innumerably as the benchmark for what constitutes the ultimate in
budget prudence. The subsequent deficits
have been referenced innumerably as the epitome of budget irresponsibility. As a professional auditor and accountant for
30 years, the critical point that has always been lacking in the debate is an
analytical review to determine the causes for the surpluses and deficits for the
years in question. I know from experience
it is possible to determine the sources of revenues and the uses of funds. There is an answer to the question, “How did
the surpluses and deficits happen?” The
only limiting factor is how many resources a person is willing to commit to
determine the causes. Certainly, the
answer becomes clearer as more years of data become available. In addition, because there is an explanation
as to how the recent budget surpluses and deficits occurred and, coupled with
the high profile the subject has had in recent years, an evaluation of the
subject offers a unique opportunity to not only determine the causes for said
surpluses and deficits, but to evaluate the associated politics and
reporting. For example, I know from my
auditing experience, if a person tries to advance an argument by stating a
conclusion and not offering substantive support, it is wise to look below the
surface. To talk intelligently about the
budgetary process and projections in the
Another
reason for this analysis was to satisfy my curiosity associated with the
pending social security burden relating to the retirement of the baby-boom
generation. An understanding on how the
budget surpluses occurred in the late 1990s is critical in my thinking in
evaluating how the
Finally, why do REPORTCARD2000.COM now?
There are numerous quotes included in REPORTCARD2000.COM but the final
catalyst leading to the analysis contained in this website occurred in May
2006. During an interview with Tim Russert on Meet the Press, soon to be Speaker of the House
Rep. Nancy Pelosi said the following:
“When President Clinton was president,
their last four budgets—his last four budgets were in surplus. We came out of
the
This
comment epitomizes the reason I developed this website. The following points are what went through my
mind:
Rep. Pelosi speaks of the $5.6 trillion as if it were a
reality. The $5.6 trillion she
referenced is a budget projection and, behind every projection, there are
assumptions. To evaluate the
meaningfulness of the $5.6 trillion budget surplus projection requires an
extensive analysis of the assumptions contained in the budget projection.
1. Tim Russert
offered no meaningful challenge to her statement. This is a clear indication Mr. Russert did not understand the process and conclusions
associated with a budget projection. I
do not think Mr. Russert is alone.
2. There are considerable restrictions
placed on CEOs and Directors when they discuss forward-looking projections, but
here we have a politician making a declaration about a forward-looking
statement as if it was a forgone conclusion, and the
comment went unchallenged.
3. The lack of substance in Rep. Pelosi’s
comment is a clear indication she either does not understand the budgeting
process or is being deceptive in the use of the conclusion derived from a
projection. Mohandas Karamachand
Gandhi addressed the unprincipled tactic used by Rep. Pelosi as he considered “politics without principles”
to be one of the traits most spiritually perilous to humanity.
4. I have heard the $5.6 trillion surplus
reference many times and it seldom gets beyond the conclusion contained in the
second sentence of a 190 page document.
Regardless of what your political party affiliation, if there was a
secret to the success, you would want to be touting the plan for success. An example of this point occurred in the 2004
vice-presidential debate when Senator John Edwards said: “Because we will do what they've not done. You know,
if you look at what's happened over the last four years, we have gone from a $5
trillion projected surplus when George Bush took office to a $3 trillion
projected deficit.” There was
no substantive explanation made by Sen. Edwards, only a conclusion they would
do what the Bush administration was not doing.
The obvious conclusion from this statement is that Sen. Edwards did not
know how the Bush administration fiscal policy varied from what a Kerry
administration would do. It was a
strained attempt to indicate that it would be different. No substance, only a fall back on the 2001 CBO
budget projection and the ignored assumptions contained in the report. Sen. Edwards was trying to score political
points by referencing a forward-looking statement without the restrictions
placed on every CEO in the
5. Based on my experience, I believe if
someone utilizes deceptive tactics when discussing budgets and projections,
there is high probability deceptive tactics are utilized in other phases of
their work. If the comments are made out
of ignorance, I believe the same conclusion exists. Based on the prosecutions of public company
executives, I believe the conclusions I have stated are well founded.
6. I have heard from economists and
politicians about what happened during the late 1990s and 2000s budgeting
processes. As an auditor and accountant
who spent years determining the sources of revenues and the uses of funds, I
believe it is time for an accountant to evaluate the
7. Rep. Pelosi is using a tactic detailed
in the book Emotional
Intelligence. By repeating the word “surplus”, Rep Pelosi is
attempting to evoke an emotional response from the listeners. Emotional Intelligence details how the
emotional part of the brain responds in one-third the amount of time needed for
the cognitive part of the brain to react and, emotions prevent cognitive thinking.
8. The exchange between Rep. Pelosi and
Mr. Russert highlights the importance of returning to
debates similar to what occurred in the Lincoln
Douglas Debates in 1858. Politicians
have become adept at managing the 10 second sound bite and no longer see the
need in a complete, coherent and competent response. Only over an extended debate schedule similar
to 1858 that is managed by the candidates according to their respective
priorities will competent theories and positions be fully developed and
understood. Furthermore, this will only
occur when the voters either elect candidates based on
this approach or demand debates in the format considered to be the high water
mark for American politics.
The
website contents will be updated when pertinent. I welcome any challenges to the content and
logic contained in the website. As a
professional auditor and accountant, this is the nature of the business.
Home Top 10 List Detailed Home Table of Contents Background Analytical Review Current Data Quotes
Contact Discussion Board