Government: The Triumph of Hope Over Experience

Government is a lot like a second marriage, the triumph of hope over experience. We create a program. Thieves loot it. Special interests manipulate it. Recipients abuse it. Old problems get worse, new problems arise. So what do we do? Pour more money into the program.

It isn’t even possible to get an adequate answer on what government is doing with our money. Reports the Associated Press:

Ten years after Congress ordered federal agencies to have outside auditors review their books, neither the Defense Department nor the newer Department of Homeland Security has met even basic accounting requirements, leaving them vulnerable to waste, fraud and abuse. An Associated Press review shows that the two departments’ financial records are so disorganized and inconsistent that they have repeatedly earned “disclaimer” opinions, meaning that they simply cannot be fully audited.

“It means we really can’t put any faith in the numbers they use,” said Ross Rubenstein, who teaches public administration at Syracuse University’s Maxwell School.

Doesn’t that just fill you with confidence? The agencies supposedly tasked with protecting us can’t even protect themselves. As the AP further details:

The AP review of financial statements from the federal government’s 15 executive departments shows that most pass their audits, although many agencies — including NASA, the Coast Guard and FEMA — have been frequently cited for serious accounting errors.

The entire Homeland Security Department, with a $35 billion budget this fiscal year, passed its first audit in 2003 with strong stipulations, but has failed every one since.

And the Defense Department, with a $460 billion budget this fiscal year, has never even come close to passing. Because that department makes up at least 20 percent of all federal spending, the entire federal government also has failed its audits since the congressional mandate took effect.

Failing an audit in any other venue could have dire consequences — a public company’s stock could plummet, state and local governments could see bond and credit ratings sink. But for the federal government, effects are less direct because the U.S. Treasury is a guaranteed funding source.

Maybe it’s time for U.S. investors to go elsewhere until Uncle Sam cleans up his books. Otherwise, it doesn’t look like Democrats or Republicans are ever going to change how Washington operates.