Official Government Balance Sheet Just Released

By
Real Estate Attorney with federalfinanciallawgroup.com

The US government just published its audited financial statements a few days ago. They are signed by Treasury Secretary Jack Lew. 

These reports are intended provide an accurate accounting of government finances, just like any big corporation would do. If our government was a corporation, this report would be followed by SELL signals or  the Grade of F.

The US government’s financial condition has declined significantly from the previous year. 

For 2015, the government reports $3.2 trillion in total assets

This includes everything from financial assets like bank balances to physical assets like tanks, bullets, aircraft carriers, and the federal highway system. 

Curiously, the single biggest line item amongst these listed assets is the $1.2 trillion in student loans that are owed to the government by the young people of America. 

This is pretty extraordinary when you think about it. 

 



37% of the government’s total reported assets are student loans, which is now considered one of the most precarious bubbles in finance. 

$1.2 trillion is similar to the size of the subprime mortgage market back in 2008. And delinquency rates are rising, now at 11.5% according to Federal Reserve data. 

It is astonishing that so much of the federal government’s asset base is linked to the ability (or non-ability) of largely younger people pay off expensive university degrees that barely land them jobs flipping burgers (for the few that even choose to work). 

On the other side of the equation are a reported $21.5 trillion in liabilities, giving the government an official net worth of negative $18.2 trillion

This is worse than last year’s negative $17.7 trillion and $16.9 trillion from 2013. It just keeps getting worse. 

But there’s one thing that’s even more incredible about all of this. 

You see, each year these financial statements are audited by the government’s in-house agency known as the Government Accountability Office (GAO). 

All big companies do this. They publish financial statements, which are then reviewed by an independent audit firm. 

Auditors are a critical component of the financial reporting process. 

It’s their responsibility to make sure that shareholders and the public can have confidence in a company’s financial statements. 

When Apple publishes an annual report, auditors go through all the books of the company and make sure that management is accurately representing the company’s true condition. 

Thus when an auditor issues a failing grade, or what’s known as a qualified opinion, there’s usually hell to pay. 

At the very hint of impropriety a company’s stock price will tank immediately. People get fired. SEC investigations are launched. 

And now based on US securities law and section 404 of the Sarbanes-Oxley Act from 2002, senior executives can face criminal charges if their companies receive a failing grade from their auditors. 

This is serious stuff. 

Yet year after year the GAO gives the federal government a failing grade in its audit report of America’s financial statements. 

In this latest report, not only did the GAO chastise the federal government for its “unsustainable fiscal path”, but they state that the federal government consistently fails to prepare “reliable and complete financial information-- both for individual federal entities and for the federal government as a whole.” 

It gets worse.....much worse....I will write about it tomorrow..

Paddy Deighan J.D. Ph.D

Timeshare Lawyers

 

Comments (5)

Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

It's always interesting to see these types of reports. I would be open to seeing more eventually.

Mar 01, 2016 01:37 PM
Darin Henderson
Holland Realty Services - Gladstone, MO
Guiding You Home

Fairly disturbing collection of information.  In particular I was completely unaware of the student loan debt figure. What immediately came to mind was I seem to recall someone recommending that we forgive these student loans.  I wonder if I could get my payments back, would this be retroactive?  Just kidding, I was proud of paying those down.  It gave me a sense of accomplishment almost as great as when I graduated.  

Mar 01, 2016 01:45 PM
Paddy Deighan MBA JD PhD
federalfinanciallawgroup.com - Vail, CO
Paddy Deighan J.D. Ph.D

Many politicians promise to forgive student loans in order to appeal to their base...but as you can see from this post, forgiveness is not an option.

Mar 01, 2016 02:28 PM
Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West & Lend Smart Mortgage, Llc. - Carlsbad, CA
Presence, Persistence & Perseverance

Paddy Deighan JD PhD I would have thought the Social Security obligation as higher than the student debt, yet just think of the financial chaos if all the student debt were to be forgiven as Bernie Sanders would like to see happen? So much for the 'Checks & Balances' in our Government!

Mar 01, 2016 08:22 PM
Paddy Deighan MBA JD PhD
federalfinanciallawgroup.com - Vail, CO
Paddy Deighan J.D. Ph.D

the student loan debt is booked as an asset since it is essentially an "account receivable" ut when 11.5% of yoru A/R is in deafult, it points to serious trouble

Mar 02, 2016 01:57 AM

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