Down the Tube

The Republican Way ------------------ has taken us down the tube!


Here we have the reality of the present US ADMINISTRATION, of which George W. Bush is THE ADMINISTRATOR. Don't forget, Congress was ruled by Republicans, they did nothing to correct this situation. Trillions and Trillions in debt they have taken us.

An illegal and unnecessary war, lies and lies to justify it, failed accounting, violation of International Law, Violation of Treaty's and the Geneva Convention, payoffs to "selected" corporations.. These are MAJOR law violations! Should not the violator be held accountable? Impeach GW Bush NOW!



Tax cuts to the rich, no replacement of that revenue, borrowing to pay the bills. If we people ran our households like this we would all be bankrupt, like the USA is now.



GOVERNMENT ACCOUNTABILITY OFFICE STATEMENT

27

December 14, 2005

The President

The President of the Senate

The Speaker of the House of Representatives

Our report on the U.S. government's consolidated financial statements for fiscal years

2005 and 2004 is enclosed. In summary, we found the following:

• Material deficiencies in financial reporting (which also represent material

weaknesses1) and other limitations on the scope of our work resulted in conditions

that, for the ninth consecutive year, prevented us from expressing an opinion on

the federal government's consolidated financial statements. Auditors for 4 of the

24 Chief Financial Officers (CFO) Act agencies issued disclaimers of opinion on

their agencies' fiscal year 2005 financial statements.2 These agencies represent

about $848 billion, or 58 percent, of the federal government's reported total assets

as of September 30, 2005, and approximately $751 billion, or 25 percent, of the

federal government's reported net cost for fiscal year 2005. Furthermore, several

CFO Act agencies had to restate certain of their fiscal year 2004 financial

statements.

• The federal government did not maintain effective internal control over financial

reporting (including safeguarding assets) and compliance with significant laws

and regulations as of September 30, 2005.

• Our work to determine compliance with selected provisions of significant laws

and regulations in fiscal year 2005 was limited by the material weaknesses

discussed in our report.

1A material weakness is a condition that precludes the entity's internal control from providing reasonable assurance that misstatements, losses, or noncompliance material in relation to the financial statements or to stewardship information would be prevented or detected on a timely basis.

2The four agencies that received disclaimers of opinion on their fiscal year 2005 financial statements were the National Aeronautics and Space Administration, the Department of Defense, the Department of Energy, and the Department of Homeland Security (DHS).

For fiscal year 2005, only DHS's consolidated balance sheet was subjected to audit. The auditor was unable to express an opinion on DHS's consolidated balance sheet as of September 30, 2005, and on the department's consolidated financial statements as of and for

the year ended September 30, 2004.

United States Government Accountability Office

Washington, DC 20548

Comptroller General

of the United States

GOVERNMENT ACCOUNTABILITY OFFICE STATEMENT

28

Three major impediments to our ability to render an opinion on the consolidated financial

statements continued to be (1) serious financial management problems at the Department

of Defense, (2) the federal government's inability to adequately account for and reconcile

intragovernmental activity and balances between federal agencies, and (3) the federal

government's ineffective process for preparing the consolidated financial statements.

Moreover, as a result of the material deficiencies we found, readers are cautioned that

amounts reported in the consolidated financial statements and related notes, certain

information contained in the accompanying Management's Discussion and Analysis, and

other financial management information that is taken from the same data sources as the

consolidated financial statements, may not be reliable. Until the problems discussed in

our audit report are adequately addressed, they will continue to have adverse implications

for the federal government and the taxpayers, which are outlined in our report.

More troubling still, the federal government's financial condition and long-term fiscal

outlook is continuing to deteriorate. While the fiscal year 2005 budget deficit was lower

than 2004, it was still very high, especially given the impending retirement of the "baby

boom" generation and rising health care costs. Importantly, the federal government's

accrual based net operating cost increased to $760 billion in fiscal year 2005 from

$616 billion in fiscal year 2004. GAO's fiscal policy simulations illustrate that without

significant changes on the spending and revenue sides of the budget, long-term deficits

will encumber a growing share of federal resources and test the capacity of current and

future generations to afford both today's and tomorrow's commitments.

The current financial reporting model does not clearly and transparently show the wide

range of responsibilities, programs, and activities that may either obligate the federal

government to future spending or create an expectation for such spending. Thus, it

provides a potentially unrealistic and misleading picture of the federal government's

overall performance, financial condition, and future fiscal outlook. The federal

government's gross debt3 in the consolidated financial statements was about $8 trillion as

of September 30, 2005. This number excludes such items as the gap between the present

value of future promised and funded Social Security and Medicare benefits, veterans'

health care, and a range of other liabilities (e.g., federal employee and veteran benefits

payable), commitments, and contingencies that the federal government has pledged to

support. Including these items, the federal government's fiscal exposures now total more

than $46 trillion, up from about $20 trillion in 2000. This translates into a burden of about

$156,000 per American or approximately $375,000 per full-time worker, up from

$72,000 and $165,000 respectively, in 2000. These amounts do not include future costs

resulting from Hurricane Katrina or the conflicts in Iraq and Afghanistan. Continuing on

this unsustainable path will gradually erode, if not suddenly damage, our economy, our

standard of living, and ultimately our national security.

Additionally, tax expenditure amounts are not required to be disclosed, nor are they

disclosed, in agency or the U.S. government's consolidated financial statements. Tax

expenditures are reductions in tax revenues that result from preferential provisions, such

as tax exclusions, credits, and deductions. These revenue losses reduce the resources

available to fund other programs or they require higher tax rates to raise a given amount

of revenue. As we reported in September 2005, the number of tax expenditures more than

doubled since 1974, and the sum of tax expenditure revenue loss estimates tripled in real

terms to nearly $730 billion in 2004.4 Enhanced reporting on tax expenditures would

ensure greater transparency and accountability for revenue forgone by the federal

government and provide a more cohesive picture of the federal government's policies and

fiscal position.

3The federal government's gross debt consists of debt held by the public and intragovernmental debt holdings.



Addressing the nation's long-term fiscal imbalance constitutes a major transformational challenge that may take a generation or more to resolve. Given the size of the projected deficit, the U.S. government will not be able to grow its way out of this problem—tough choices are required.

Full report here: http://www.fms.treas.gov/fr/05frusg/05gao1.pdf

But there is more, the dollar value is rapidly going down as the world is abandoning the dollar and seeking EURO's.
A Weaker Dollar and a Receding US Influence
Kamel Wazneh Al-Hayat - 08/12/06//

Central banks worldwide began discarding the dollar in favor of the euro in an attempt to minimize their losses following the decline in the value of the US currency.

An opinion poll conducted by the Management Trend research firm showed that more than two thirds of the world's central banks have reduced their exposure to the US dollar.

According to the poll conducted in 2005, 65% of central banks, managing more than two trillion US dollars, have begun to realize that the US currency cannot be relied on for these banks' reserves.

More recently, the euro rallied against the US dollar to the 1.32 mark, the US dollar has shed more than 14% of it value against the euro over the last year, and 50% of its value over the past five years. This decline is attributed to fears over the US' trade deficit with the rest of the world's countries.

This deficit exceeded $586 billion by the third quarter of this year, and is expected to exceed $716 billion by the end of the year. The greater part of this deficit is a result of the trade exchange with China.

The drop in the exchange rate of the US dollar was also linked to a poll conducted by German economic departments, which revealed an increase in the levels of confidence in the performance of the European economy to a 15-year-high.

The increased strength of the euro comes as US citizens and the US government enjoy the most favorable terms in the international trade exchange, as they borrow trillions of dollars worth of commodities, housing, and military funding from abroad at a cost of borrowing that does not exceed 5%, while at the same time, returns on US foreign investments exceed 20%, leading to a situation in which the US foreign debt reached $13.6 trillion, or $119,000 owed by each American household.

Geostrategic pressures, North Korea's nuclear test, the war in Iraq, the tension over Iran's nuclear file, threats to the continuity of the flow of supplies from the Middle East and natural gas from Russia, and, finally, Iran's announcement of selling natural derivatives in euros; all this constitutes pressures on US policies and US economy, which reduces confidence in the US' ability to face all these challenges.

Over the coming decades, such challenges could lead to a receding US military, political and economic influence, and may even push the US into isolation and regression toward within.

Can the US dollar maintain its status as a safe haven, and at the same time the leading currency for trade exchange?

From a historical perspective, 60-90% of trade exchange in the 19th century was conducted in the Pound Sterling, and Great Britain enjoyed a superpower status before the turning of the US dollar into the leading currency of the world's economy.

Data that has emerged over the few past weeks, however, points to the possibility of new European members, in addition to Britain, joining the unified monetary bloc by 2020, and making the euro the world's leading currency.

With its economic power, China is also expected to become the world's top exporter by 2010, and the world's economic superpower by 2020.

Accordingly, all the indications suggest that the US dollar might run out of luck over the next 20 years, and also concerns over the impact of a declining population growth level on European economic growth rates are not as serious as concerns over the US' growth rates, as the Europeans are also expected to correct this imbalance by opening the door to skills and workforce from Eastern Europe and the rest of the world.

On the short run, the US administration has publicly welcomed the gradual drop in the US dollar's exchange rate as a starting point for dealing with its increasing trade deficit, since a weaker US dollar value increases the competitiveness of US goods against those from Europe and Asia.

A lower US dollar exchange rate is also expected to push Asian banks to prepare themselves to interfere in financial markets to prevent the rising of exchange rates of their own currencies, in order to maintain strong sales.

This comes amid an American silence, the impact of which may be seen in the policies of US Secretary of Treasury, Henry Paulson, who laid down a policy for letting financial markets, not political statements or flagrant US interference, determine the US dollar's exchange rate. Americans, however, are pushing China to liberate its currency and raise the value of the yuan to reduce the trade definite with the US.

Statements by the Governor of the Chinese Central Bank that his country plans to diversify its monetary reserves to include currencies other than the US dollar have also convinced analysts that this will negatively impact the US dollar's exchange rate.

The Democrat Party's victory in the latest US elections also constitutes future pressures on the US relations with China; taking into consideration the fact that ingoing president of the House of Representatives has previously accused China of manipulating its currency to maintain the current trade surplus with the US.

Whether on the account of internal or external indications, the US dollar is expected to face significant pressures. World banks are also expected to take action to avoid threats posed by the US dollar. For, it is a well-known fact that a strong currency is the reflection of a strong nation. Accordingly, will a weaker US dollar impact the US' influence in the world?

http://english.daralhayat.com/business/12-2006/Article-20061208-6242b309-c0a8-10ed-019f-76a5636a81d7/story.html



We need a National Initiative and Binding Referendum for US.




--
Bruce Eggum
Gresham Wisconsin, USA
http://www.doinggovernment.com/
Check out my Blog too
http://bruceeggum.blogster.com/


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