PhillyDeals: Why the United States can't audit its own budget

The government's own auditors say they can't verify the accuracy of the budget of the United States, because the military, Medicare planners, and other big federal programs are doing such a poor job explaining what they do with the people's money.

This is at least the 10th consecutive year that the Government Accountability Office has found the federal budget un-auditable, spokeswoman Laura Kopelson told me.

In a statement, Acting Comptroller General Gene Dodaro cited "serious financial management problems at

the Department of Defense" and "significant uncertainties" over cuts to Medicare doctor reimbursements and other Medicare cost cuts.

He also blamed $125 billion in "improper payments," poor accounting of government payments to government agencies, and problems with "information security" and tax collection.

The worst accounting offenders were the Departments of Defense, Homeland Security, and Labor.

Not everyone's to blame. Some 19 of the 24 main U.S. agencies actually presented "clean" books, the GAO found.

For more information, check the fiscal year 2010 Financial Report of the United States Government, which includes the non-audit, at http://www.gao.gov/financial.html.

"What's going on with tax policy in Washington right now seems crazy," writes ex-Inquirer and ex-New York Times tax reporter David Cay Johnston at Tax.com. "Crazy tax policies, crazy borrowing," and crazy neglect of the national infrastructure and reasonable policy that attracts domestic investment instead of punishing it, Johnston reports.

He lists a string of examples, from President Richard Nixon's efforts that made it easier for U.S. manufacturers to move to low-wage China, through President Obama's violation of his own campaign pledges to boost taxes for the rich. The richest Americans were spared by Obama cutting a deal with Republican Senate leaders, who call themselves budget-balancers. The deal forces the government to borrow tens of billions of dollars so it can cut taxes for the rich and most everyone else, driving the record deficit still higher.

Bad politics? Worse, says Johnston:

"America is in the grip of a full-blown societal panic. Crazy, irrational, contradictory ideas about tax policy are just the most obvious symptom."

The root cause is Americans' slow realization that the United States no longer dominates the world economy like it did after World War II.

Johnston says global competition, the eroding dollar, and heavy borrowing have been made worse by a generation of political attempts to pump up the financial markets and other services, instead of confronting these changes with steady federal investments and fair taxes.

"The fear of what the new American economy means is killing reasoned debate about taxes, tax policy, and how to distribute the burdens of making our great nation function," Johnston concludes.

"We will never get on a path to sound tax policy, policy that flows from the new economic order instead of against it, until enough of us stand back from the riotous conditions and find a place where rational debate about taxes can grow into popular understanding."

He could add, there's also the need to find leaders strong enough to sell sensible programs.

Next time someone tells you the U.S. court system is out of control, consider this:

One day way back in 2002, Dr. Anoop Kapoor and his friend Dr. Azaz Anand went golfing on Long Island.

"Without yelling 'Fore' or giving any other warning," according to court filings, "Kapoor 'shanked' a shot," hitting Anand in the left eye, knocking loose his retina and causing "permanent loss of vision."

Anand sued Kapoor. Welcome to America! Decision, appeal, appeal, appeal.

Finally, Tuesday, New York's highest court ruled: "A person who chooses to participate in a sport or recreational activity consents to certain risks. Failure to warn of his intent to strike the ball did not amount to intentional or reckless conduct, and did not unreasonably increase the risks inherent in golf. . . .

"Being hit without warning by a 'shanked' shot while one searches for one's own golf ball reflects a commonly appreciated risk."

So no damages, and plaintiff pays costs.

And it only took eight years!