7 ms·

MSU Scholars Find $21T in Unauthorized Government Spending

137 points by sillypuddy 9y ago

jondubois 9y ago
The number sounds ridiculously large but I'm not surprised that these things happen. The entire financial system is built on fraud. I think that most people understand this at least subconsciously. Many years ago, being honest and forthcoming was beneficial and people appreciated honesty. If you made a mistake and were honest about it as soon as it came to your awareness, people would respect you for it and would be more lenient. These days this is not the case, being honest is actually a disadvantage. Lying and cheating is always the best option. People don't give a crap about honesty anymore, only money and social status. So in a world where the value of honesty is a negative number, it's not surprising at all that fraud is rampant.
- mannykannot 9y ago
  It is not clear from the article that this is mostly fraud. It appears that it might cover anything not done strictly according to procedure or documented incorrectly. And 'not done strictly according to procedure' may or may not be a serious issue in any given case. Most bureaucracies have some rules that are incomplete, contradictory or simply infeasible. Audits are a good idea, but I don't expect the $21T figure to stand, except perhaps in a purely formal way.
cheschire 9y ago
I’m sure it can be frustrating to try to follow the rules in that environment when everyone around you seems to be getting their purchases through the system and you’re constantly being told there isn’t any money. I can imagine it would create a culture that demands lack of ethics to get anything accomplished.
- putinontheritz 9y ago
  I worked for the DOE for 12 years. There certainly were shady, sweetheart, and down right suspicious deals that happen for services, hardware and software.
nuttzy99 9y ago
I'm filing this one under "Don't believe everything you read on the internet" until more evidence surfaces. The number is just too fantastic. That's the about the same size as our national debt, making it very hard to believe a number that large is possible.
- moxious 9y ago
  Thought the same thing. So if the conclusion is true why is this also not being picked up by major news outlets? It would be major news
  - ballenf 9y ago
    The media don't report much "general" incompetence. If there's a link that this was done as cover for malfeasance or graft then it would be newsworthy. As it is, it's an eye-glazingly complicated story about government accounting regardless of how big the numbers are. It's hard to imagine the number of hours necessary to fact check the article not to mention finding experts in the field to break it all down.
    - moxious 9y ago
      Oh come on. A publication like the Economist lives for stuff like this, as a story of this magnitude would have lots of knock on effects. Daily press does tend to go after blow-by-blow stuff but you're selling the media short. The entire Trump collusion thread right now is itself crazy complicated and it's in the news daily.
      - kim_waxkoz 9y ago
        lmao remind me again who owns the economist? and why u think they would snitch on themselves?
- larrydag 9y ago
  With respect to the article it is over a 17 year period. According the the U.S CBO annual spending is around $4 trillion. I'm personally not surprised by these numbers. https://www.cbo.gov/publication/52408 https://www.cbo.gov/publication/52408
obblekk 9y ago
Where would a government department get this much actual money? Do they just have unlimited debit accounts? At some point someone in the treasury has to transfer the money and notice it’s above the budget right?
- dekrg 9y ago
  It's entirely possible that this spending is within their budgets. The article talks about unauthorized spending not that they had extra money or did over budget spending. So a lot of it could depend on how one defines unauthorized spending.
  - cdetrio 9y ago
    It actually does say that the Army spent over their budget: Skidmore got involved last spring when he heard Catherine Austin Fitts, former assistant secretary of Housing and Urban Development, refer to a report which indicated the Army had $6.5 trillion in unsupported adjustments, or spending, in fiscal 2015. Given the Army’s $122 billion budget, that meant unsupported adjustments were 54 times spending authorized by Congress.
    - dekrg 9y ago
      US budget for 2015 was 3.688 trillion USD[0]. There are many things that are possible, but US army spending nearly double of the entire US budget without anyone noticing isn't one of them. [0] https://en.wikipedia.org/wiki/2015_United_States_federal_budget https://en.wikipedia.org/wiki/2015_United_States_federal_bud...
Juan_Largearm 9y ago
I'm guessing black ops that they don't want put on the books.
- djKianoosh 9y ago
  it's not that glamorous.
TheAdamist 9y ago
The entire 2015 federal budget was around $3.9 trillion. If just the army had spent $5.6 trillion in 2015 that would be noticed. This article can't make extraordinary claims with extraordinary proof (or any proof) to back it up.
- icebraining 9y ago
  The article has a link to https://missingmoney.solari.com/dod-and-hud-missing-money-supporting-documentation/ https://missingmoney.solari.com/dod-and-hud-missing-money-su...
- moxious 9y ago
  If that much money were spent, someone would have to be receiving it. That's enough money to make thousands of unicorn companies....per year. WTF
UncleEntity 9y ago
> Now, the Department of Defense has announced it will conduct the first department-wide, independent financial audit in its history I recall a few (somewhere between 5 and 10) years ago they tried to do an audit and just threw their arms up in the air and said "impossible". A bunch of people are going to choke on their morning coffee over this but I'm just going to say it: Trump promised to bring accountability to government and here's the DoD performing the impossible. I know, heresy...
- mannykannot 9y ago
  If it gets done, I, for one, will applaud.
- TheWiseOne 9y ago
  Just so you know, this (the audit) was initiated under the Obama administration back on 2010. All Federal agencies were required to go through an audit but the DOD got a waiver for 7 years, which is why you are seeing this now.
fundingshovel 9y ago
Read more carefully, that's the total of all improperly accounted for transactions, not lost money. While it's still a complete shit show. There's a huge, almost click bate difference.
- joeframbach 9y ago
  The title right now is "MSU Scholars Find $21T in Unauthorized Government Spending". Did it change?
  - fundingshovel 9y ago
    No, but the report is about journal voucher adjustments which isn't spending exactly spending. The report says not that they're "spending" $21T, but that they made a cumulative amount of errors and corrections in their vouchers equalling $21T and have really poor audit controls. While bad audit controls is a legitimate and serious problem, it very much is not the same as what people normally think of as "Spending".
    - roganp 9y ago
      But these are adjustments that are larger than the entire (associated) budget. How is even possible? How do poor controls lead to these astronomical errors?
sschueller 9y ago
How are these hidden expenses paid for without being noticed? Is the money just printed? Wouldn't that cause huge inflation?
- propogandist 9y ago
  US does own the money supply and print money, if you question our authority then you may be destroyed see: https://www.youtube.com/watch?v=XWuAct1BxHU https://www.youtube.com/watch?v=XWuAct1BxHU
down 9y ago
buy bitcoin
seibelj 9y ago
I’m constantly amazed with the mental gymnastics people who advocate for tax increases partake in. The know the government is abysmal with money, yet think by giving it a blank check that magically all societal ills will be solved.
- deleted 9y ago
  [deleted]
- candiodari 9y ago
  The problem is that the mental gymnastics of both sides are so full of holes they are absurd. The left - we're just going to force everything to be correct and just, including of course, and most importantly, who has money for what. Needless to say, historical societies went quite far in this, and to say it didn't happen is an understatement. The right - just give more money to people who already have it, and clearly hoard it (that's what lowering taxes does), and they will make everything just and correct. Needless to say, historically this has been done and to say things did not in fact become fair and just is an incredible understatement. Neither works. Obviously.
westurner 9y ago
Unauthorized federal spending (in these two departments) 1998-2015: $21T Federal debt (2017): $20T $ 20,000,000,000,000 USD
- deleted 9y ago
  [deleted]
- westurner 9y ago
  Would a blockchain for government expenditures help avoid this type of error? We already now have https://usaspending.gov https://usaspending.gov ( https://beta.usaspending.gov https://beta.usaspending.gov ) and expenditure line item metadata. Would having traceable money in a distributed ledger help us keep track of money collected from taxpayers? Obviously, the volatility of most cryptocurrencies would be disadvantageous for purposes of transferring and accounting for government spending. Isn't there a way to peg a cryptocurrency to the USD; even with Quantitative Easing? How is Quantitative Easing different from just deciding to print trillions more 'coins' in order to counter debt or inflation or deflation; why is the government in debt at all?
  - westurner 9y ago
    re: Quantitative Easing https://en.wikipedia.org/wiki/Quantitative_easing https://en.wikipedia.org/wiki/Quantitative_easing Say I have $100 in my Social Security Fund (in very non-aggressive investments which need to meet or exceed inflation) and the total supply of money (including paper notes and numbers in debit and credit columns of various public and private databases) the total supply of money is $1T with $1T in debt; if 1T is printed to pay for that debt, is my $100 in retirement savings then worth $50? Or is it more complex than that?

137 points by sillypuddy 9y ago

The number sounds ridiculously large but I'm not surprised that these things happen. The entire financial system is built on fraud. I think that most people understand this at least subconsciously. Many years ago, being honest and forthcoming was beneficial and people appreciated honesty. If you made a mistake and were honest about it as soon as it came to your awareness, people would respect you for it and would be more lenient. These days this is not the case, being honest is actually a disadvantage. Lying and cheating is always the best option. People don't give a crap about honesty anymore, only money and social status. So in a world where the value of honesty is a negative number, it's not surprising at all that fraud is rampant.

mannykannot 9y ago
It is not clear from the article that this is mostly fraud. It appears that it might cover anything not done strictly according to procedure or documented incorrectly. And 'not done strictly according to procedure' may or may not be a serious issue in any given case. Most bureaucracies have some rules that are incomplete, contradictory or simply infeasible. Audits are a good idea, but I don't expect the $21T figure to stand, except perhaps in a purely formal way.

cheschire 9y ago

I’m sure it can be frustrating to try to follow the rules in that environment when everyone around you seems to be getting their purchases through the system and you’re constantly being told there isn’t any money. I can imagine it would create a culture that demands lack of ethics to get anything accomplished.

putinontheritz 9y ago
I worked for the DOE for 12 years. There certainly were shady, sweetheart, and down right suspicious deals that happen for services, hardware and software.

nuttzy99 9y ago

I'm filing this one under "Don't believe everything you read on the internet" until more evidence surfaces. The number is just too fantastic. That's the about the same size as our national debt, making it very hard to believe a number that large is possible.

moxious 9y ago
Thought the same thing. So if the conclusion is true why is this also not being picked up by major news outlets? It would be major news
- ballenf 9y ago
  The media don't report much "general" incompetence. If there's a link that this was done as cover for malfeasance or graft then it would be newsworthy. As it is, it's an eye-glazingly complicated story about government accounting regardless of how big the numbers are. It's hard to imagine the number of hours necessary to fact check the article not to mention finding experts in the field to break it all down.
  - moxious 9y ago
    Oh come on. A publication like the Economist lives for stuff like this, as a story of this magnitude would have lots of knock on effects. Daily press does tend to go after blow-by-blow stuff but you're selling the media short. The entire Trump collusion thread right now is itself crazy complicated and it's in the news daily.
    - kim_waxkoz 9y ago
      lmao remind me again who owns the economist? and why u think they would snitch on themselves?
larrydag 9y ago
With respect to the article it is over a 17 year period. According the the U.S CBO annual spending is around $4 trillion. I'm personally not surprised by these numbers. https://www.cbo.gov/publication/52408 https://www.cbo.gov/publication/52408

obblekk 9y ago

Where would a government department get this much actual money? Do they just have unlimited debit accounts? At some point someone in the treasury has to transfer the money and notice it’s above the budget right?

dekrg 9y ago
It's entirely possible that this spending is within their budgets. The article talks about unauthorized spending not that they had extra money or did over budget spending. So a lot of it could depend on how one defines unauthorized spending.
- cdetrio 9y ago
  It actually does say that the Army spent over their budget: Skidmore got involved last spring when he heard Catherine Austin Fitts, former assistant secretary of Housing and Urban Development, refer to a report which indicated the Army had $6.5 trillion in unsupported adjustments, or spending, in fiscal 2015. Given the Army’s $122 billion budget, that meant unsupported adjustments were 54 times spending authorized by Congress.
  - dekrg 9y ago
    US budget for 2015 was 3.688 trillion USD[0]. There are many things that are possible, but US army spending nearly double of the entire US budget without anyone noticing isn't one of them. [0] https://en.wikipedia.org/wiki/2015_United_States_federal_budget https://en.wikipedia.org/wiki/2015_United_States_federal_bud...

Juan_Largearm 9y ago

I'm guessing black ops that they don't want put on the books.

djKianoosh 9y ago
it's not that glamorous.

TheAdamist 9y ago

The entire 2015 federal budget was around $3.9 trillion. If just the army had spent $5.6 trillion in 2015 that would be noticed. This article can't make extraordinary claims with extraordinary proof (or any proof) to back it up.

icebraining 9y ago
The article has a link to https://missingmoney.solari.com/dod-and-hud-missing-money-supporting-documentation/ https://missingmoney.solari.com/dod-and-hud-missing-money-su...
moxious 9y ago
If that much money were spent, someone would have to be receiving it. That's enough money to make thousands of unicorn companies....per year. WTF

UncleEntity 9y ago

> Now, the Department of Defense has announced it will conduct the first department-wide, independent financial audit in its history I recall a few (somewhere between 5 and 10) years ago they tried to do an audit and just threw their arms up in the air and said "impossible". A bunch of people are going to choke on their morning coffee over this but I'm just going to say it: Trump promised to bring accountability to government and here's the DoD performing the impossible. I know, heresy...

mannykannot 9y ago
If it gets done, I, for one, will applaud.
TheWiseOne 9y ago
Just so you know, this (the audit) was initiated under the Obama administration back on 2010. All Federal agencies were required to go through an audit but the DOD got a waiver for 7 years, which is why you are seeing this now.

fundingshovel 9y ago

Read more carefully, that's the total of all improperly accounted for transactions, not lost money. While it's still a complete shit show. There's a huge, almost click bate difference.

joeframbach 9y ago
The title right now is "MSU Scholars Find $21T in Unauthorized Government Spending". Did it change?
- fundingshovel 9y ago
  No, but the report is about journal voucher adjustments which isn't spending exactly spending. The report says not that they're "spending" $21T, but that they made a cumulative amount of errors and corrections in their vouchers equalling $21T and have really poor audit controls. While bad audit controls is a legitimate and serious problem, it very much is not the same as what people normally think of as "Spending".
  - roganp 9y ago
    But these are adjustments that are larger than the entire (associated) budget. How is even possible? How do poor controls lead to these astronomical errors?

sschueller 9y ago

How are these hidden expenses paid for without being noticed? Is the money just printed? Wouldn't that cause huge inflation?

propogandist 9y ago
US does own the money supply and print money, if you question our authority then you may be destroyed see: https://www.youtube.com/watch?v=XWuAct1BxHU https://www.youtube.com/watch?v=XWuAct1BxHU

down 9y ago

buy bitcoin

seibelj 9y ago

I’m constantly amazed with the mental gymnastics people who advocate for tax increases partake in. The know the government is abysmal with money, yet think by giving it a blank check that magically all societal ills will be solved.

deleted 9y ago
[deleted]
candiodari 9y ago
The problem is that the mental gymnastics of both sides are so full of holes they are absurd. The left - we're just going to force everything to be correct and just, including of course, and most importantly, who has money for what. Needless to say, historical societies went quite far in this, and to say it didn't happen is an understatement. The right - just give more money to people who already have it, and clearly hoard it (that's what lowering taxes does), and they will make everything just and correct. Needless to say, historically this has been done and to say things did not in fact become fair and just is an incredible understatement. Neither works. Obviously.

westurner 9y ago

Unauthorized federal spending (in these two departments) 1998-2015: $21T Federal debt (2017): $20T $ 20,000,000,000,000 USD

deleted 9y ago
[deleted]
westurner 9y ago
Would a blockchain for government expenditures help avoid this type of error? We already now have https://usaspending.gov https://usaspending.gov ( https://beta.usaspending.gov https://beta.usaspending.gov ) and expenditure line item metadata. Would having traceable money in a distributed ledger help us keep track of money collected from taxpayers? Obviously, the volatility of most cryptocurrencies would be disadvantageous for purposes of transferring and accounting for government spending. Isn't there a way to peg a cryptocurrency to the USD; even with Quantitative Easing? How is Quantitative Easing different from just deciding to print trillions more 'coins' in order to counter debt or inflation or deflation; why is the government in debt at all?
- westurner 9y ago
  re: Quantitative Easing https://en.wikipedia.org/wiki/Quantitative_easing https://en.wikipedia.org/wiki/Quantitative_easing Say I have $100 in my Social Security Fund (in very non-aggressive investments which need to meet or exceed inflation) and the total supply of money (including paper notes and numbers in debit and credit columns of various public and private databases) the total supply of money is $1T with $1T in debt; if 1T is printed to pay for that debt, is my $100 in retirement savings then worth $50? Or is it more complex than that?