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U.S. State Finances – Lack “Truth and Integrity” – Volcker Warns
U.S. State Finances – Lack “Truth and Integrity” – Volcker Warns
- U.S. state budgets rely on “faulty practices” – Volcker
- Shoddy budget practices push costs to future generations
- Faulty budget practices lead to poor policy making
- “Problems hidden by lack of truth and integrity” – Volcker
- No common definition of balanced budget allows for gimmicks
The highly regarded former chairman of the Federal Reserve, Paul Volcker, has severely criticized the State Governments in the U.S. over “faulty practices” used to devise budgets which mask the true financial position of those states.
Mr. Volcker, who as Fed chair reined in escalating inflation and stabilised the economy during Ronald Reagan’s tenure, announced in 2013 his intention to form the Volcker Alliance to focus on reforming democracy in the U.S.
It was in a report from the Volcker Alliance that the criticisms were published.
“The palpable erosion of trust in our democratic institutions of government demands a response,” he was quoted as saying.
Mounting fiscal problems in Obama’s Illinois, Detroit’s bankruptcy and the financial troubles coming to a head in Puerto Rico demonstrate the importance of developing better financial policies according to the report.
The dire state of finances in many states has intensified in recent years due to drastic cuts in federal funding following the recession. As a result state budgets are recklessly pushing the costs of current expenditure onto future generations.
“The continued fiscal stress is tempting states to continue, and even intensify, budgeting and accounting practices that obscure their true financial position, shift current costs on to future generations, and push off the need to make hard choices on spending priorities and revenue practices,” the report states.
States are on a constant emergency footing where their budgets are concerned as they try to fund current expenditure with transient sources of revenue. As a result policy making is haphazard and short-sighted.
“The never-ending sense of crisis leads to stop-and-go funding of vital programmes and stifles the need for serious discussions about policy,” according to the report.
As a consequence infrastructure is crumbling, public schools and state lack funding, “rainy day” funds are being depleted, and public workers rely on pension plans that may evaporate.
Volcker believes that there is a lack of honesty in budgeting. “There are problems hidden by a lack of truth and integrity”, he said. The absence of an agreed definition of “balanced budget” allowed States to engage in gimmicks that gave the appearance that spending had not exceeded revenue.
“Techniques include shifting the timing of receipts and expenditures across years, borrowing long-term to pay for current bills, using non-recurring revenues to cover recurring costs and delaying funding of pension and healthcare retirement benefits,” reported the FT.
The report paid particular attention to three states selected at random. They were Virginia, California and New Jersey. Volcker believes that Virginia’s methodology is good, using impartial outside economists. It was still heavily reliant on federal funding however.
The current governor of California has acknowledged the “wall of debt” that was hidden behind budgetary gimmicks and has reduced the debt significantly since 2010.
New Jersey, however, is a case study in bad budgetary practices. The New York Times reports,
“In contrast to California, New Jersey is still producing structural imbalances, according to the report. It has been struggling from year to year by, among other things, taking money out of special dedicated funds and spending it on unrelated activities.”
“For instance, the state has raided hundreds of millions of dollars in toll revenue from the New Jersey Turnpike Authority and used the money to pay for the day-to-day operations of New Jersey Transit. The toll money was supposed to pay for highway construction and maintenance, not mass transit.”
The NY Times adds,
“One factor that appeared to make such raids possible is that New Jersey’s official budgeting process is centralized in the governor’s office, giving the executive branch almost sole control over revenue forecasts and spending decisions.”
Mr. Volcker hopes that by identifying various problem areas in state budgets, a common approach may be developed across the U.S. which would help nurse the ailing states back to good health. If improvements are not made an unpleasant day of reckoning may be approaching.
“It’s like termites eating at a structure,” said Mr. Volcker, “The building hasn’t fallen down yet. But if you get enough termites, the building’s going to get pretty rickety.”
How true. Indeed, the problem with the U.S. finances is not just at a state level but also at a national level where there is a similar “lack of truth and integrity.”
The national fiscal position of the U.S. is dire – with a National Debt or Federal Debt of $18.2 trillion and a real national debt and “unfunded liabilities” alone of over $100 trillion.
See Global Debt Now $200 Trillion! & Goldman Sachs Warns “Too Much Debt” Threatens World Economy
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,181.00, EUR 1,046.75 and GBP 772.40 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,173.40, EUR 1,053.32 and GBP 769.85 per ounce.
Gold in USD – 1 Week
Gold climbed $3.10 or 0.26% percent yesterday to $1,174.00 an ounce. Silver slipped $0.08 or 0.5 percent to $16.02 an ounce.
Gold in Singapore for immediate delivery inched up 0.4 percent to $1,177.60 an ounce near the end of the day, while gold in Switzerland saw a rise to touch $1,182 an ounce.
Gold is higher today on what appears to be a safe haven bid after equities in Asia and Europe sold off today.
Concerns about the slowing U.S. and Chinese economy and their impact on the global economy are causing jitters.
Gold may also be seeing more safe haven bids from the uncertainty of the ongoing Greece crisis. German Chancellor Angela Merkel warned yesterday that Greece’s time was running out to negotiate a reform-for-aid deal to stay in the eurozone.
Oil prices are 1.2% higher today and that is likely supporting gold. Higher seasonal demand in developed markets and geopolitical risk in the Middle East is offsetting the impact of the global supply overhang.
Shanghai Gold Exchange premiums were almost $2.50 an ounce over the global benchmark, up slightly from $1.50-$2 last week, suggesting Chinese demand remains robust.
In late morning trading gold is up 0.70 percent at $1,182.55 an ounce. Silver is up 1.3 percent at $16.22 an ounce, while platinum is up 1.05 percent at $1,113.20 an ounce.
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Is it possible that the TPTB and their Elite owners don't know the ulitimate outcome of this luncacy?
They usurped the power of the State and hold it entirely in their hands now, where it is bullet proof. They control all things, so what has been happening and its path is all decided upon and acceptable to them.
Can almost believe that they decided that if their plans do fail their is always global war backstop.
So is the USA manufacturing trouble with Russia and China to give themselves a global war option if their other plans turn to shit.
(Also want to ask Merkle if she minds if Russia drops a tactical nuclear missile on their US military bases in Germany, in response to same on Russian soil)
Paul is a big man. I met him once in Bagdad by the Bay. He should have kicked ass when he had the chance. Now he should just give his vast wealth back to, say, the END THE FED FOUNDATION.
Volker is a dick sucking fool.
Rude and irrelevant comment, simpletton.
With the moniker, 'soul glow', you make a mockery of your namesake.
Nope, he was a JEW too!
“The palpable erosion of trust in our democratic institutions of government demands a response,” he was quoted as saying. My response would be what fucking caliber would be appropriate?
Once termites invade a home, fixing generally isn't an option. The termite invasion occurred a long long time ago. The only option now, is to demolish and build from scratch.
Like that's going to happen.
“It’s like termites eating at a structure,” said Mr. Volcker, “The building hasn’t fallen down yet. But if you get enough termites, the building’s going to get pretty rickety.”
So then we approaching the beginnig to the end to the Oligarchs and the "truthiness" is a gasp.
Here comes Tyranny:
"The first governments were kingships, probably for this reason, because of old, when cities were small, men of eminent virtue were few. Further, they were made kings because they were benefactors, and benefits can only be bestowed by good men. But when many persons equal in merit arose, no longer enduring the pre-eminence of one, they desired to have a commonwealth, and set up a constitution. The ruling class soon deteriorated and enriched themselves out of the public treasury; riches became the path to honor, and so oligarchies naturally grew up. These passed into tyrannies and tyrannies into democracies; for love of gain in the ruling classes was always tending to diminish their number, and so to strengthen the masses, who in the end set upon their masters and established democracies. " ~ Aristotle - Politics, Book 3, part 15
REAGAN or CARTER?
"Mr. Volcker, who as Fed chair reined in escalating inflation and stabilised the economy during Ronald Reagan’s tenure, announced in 2013 his intention to form the Volcker Alliance to focus on reforming democracy in the U.S."
If my memory serves me, Volcker was nominated by President Jimmy Carter, and soon after taking office at the Fed (and while Carter was still President), Volcker raised interest rates. This slowed the economy, which cost a lot of people their jobs, and Carter failed to get reelected. Ronald Reagan beat Carter and became President.
I always wondered whether TPTB decided to get Carter out because, being a real Christian, Carter had not started any profitable wars. I always wondered whether raising interest rates was the MEANS they decided to use to get Carter out.
TPTB had a much more significant reason to get rid of Carter. His Cardigan Sweater chats:
https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rj...
Yeah. "Carter was a wimp". HA HA. A wimp who served on a nuclear submarine, and who ran his own farm, and built it up, and who successfully ran for Governor, and who as Governor fought the Army Corps of Engineers, and who, after being President, personally went to quite a few countries right in the middle of violent election campaigns as an observer of the elections. THE FACT IS that there is not one molecule of wimp in Jimmy Carter.
Thank U Rosalyn.
Biggest most lucrative state: http://www.sco.ca.gov/eo_about_bio.html
Ya no motive to cook the books there
It's all a sham captain obvious, with the biggest liar being the feral FEDERAL government!
New Joesy says "it ain't over" till the fat man sings!
COP bonds , a loan against socialist invasion with the interest and principle payments rolled over and dumped on the presumably wealthier future.
Our govt now let's bond securitizers include future federal grants for qualifying income.
Thank you GoldCore,
I wish I could get all my news from some stupid fucking gold salesmen. Does your riviting article mean I should buy some gold?
https://www.youtube.com/watch?v=kgoFcyttk-s
The same Paul Volcker that pioneered TBTF bailout idea as chairman of Federal Reserve.
Anyone remember the Hunt Brothers? He helped arrange the loans to the tune of 1 billion dollars in 1981 to bail out the Hunt Brothers when they tried to corner the silver market but failed. They were almost wiped out financially when they couldn't cover their margin accounts. If it wasn't for those loans things might be a little different today if Mr "Truth and Integrity" didn't intervene in the markets integrity and let the market shake out all the losers.
All the big boys circled the wagons on that one
http://watch-unto-prayer.org/synarchy-4.html
...
“From 1981 to 1984, Mr. Sinclair served as a Precious Metals Advisor to Hunt Oil and the Hunt family for the liquidation of their silver position as a prerequisite for the $1 billion loan arranged by the Chairman of the Federal Reserve, Paul Volker.” (Jim Sinclair’s Mindset)
http://jsmineset.com/about
James Sinclair, of the Saint-Claire bloodline, is the son of Bertram Seligman who started Goldman Sachs, Solomon Brothers, Lehman Brothers and other major investment banking firms. (GATA) Bertram Seligman also started the Bache Group, which loaned money to the Hunt Brothers. Gaylord Freeman’s First National Bank of Chicago, a Federal Reserve bank, and Chicago Illinois Bank, a Federal Reserve ‘dealer bank,’ also made loans to the Hunts.
“Although the timing of their various loans is not clear as of this writing, it seems clear that the Hunts received loans both for buying silver and later, for paying off some of their debts. One loan was for $40,000,000 and was made by a syndicate including the Bache Group, Continental Illinois Bank and the Royal Bank of Canada. Another loan was for $233,000,000 and was made by the First National Bank of Chicago, Irving Trust and eight other large banks. In addition, the New York branch of Swiss Bank lent the Hunts $200,000,000 and Citibank lent $17,500,000. While the conditions of those loans have yet to be made clear, they were apparently made in defiance of Federal Reserve Board chairman Paul Volker’s request that banks not make loans for commodity speculation.” (“Silver finger”)
These loans were not made over the objections of Paul Volcker, but arranged by him through the First National Bank of Chicago and Continental Illinois, which were Federal Reserve-related banks.
...
Drwey you don't know shat you are talking about.
The Hunt brothers DID corner the silver market in the early 80's. The reason they went bust is that Zionist regulators at the COMEX changed the margin rules to screw the Hunt brothers in order to save their fellow Zionists from their losing short silver positions.
Volcker facilitated the backdoor bailing out of investment banks on the winning end of that trade when the Hunt's couldn't pay up come margin call time. That is some truth and integrity right there when you don't punish the players for cheating and protect the others from the consequences of it....
Tells you whose integrity he was trying to preserve, it sure as hell wasn't the game.
4 years ago I fell broke my back, stopped working and didn't file papers with anybody, the state of CA fabricated me an annual income and sent me a bill every year based entirely on wishful thinking, I'm pretty sure the state took my "debts" and used them to borrow additional bond funds.
in san diego the mayor and his task force (inlcuding the county supervisors) want to give money for a new stadium for a perennially average team. this is taxpayer money (where else did they get it) but the lying sobs are selling this project as not requiring them to RAISE taxes. (beware of the politician who gets a bit of surplus, who juggle the books to create cash based on short funding long term liablities...) police in SD have a poor retention rate, the fire department is run by a woman battion chief who was set to retire, they depend on state resources when things get bad. we are in a major drought and every time a water main breaks hundreds of thousands of gallons go into the ocean, and they break a lot. i am beyond getting pissed about this, san diego will pay for the team which is owned privately. it will continue to tax their resources, and it will cost the city money beyond what the stadium costs the city will pay to run it, and the owners will collect the money. the major benefit is corporations who use the skyboxes to make business deals, the cost of the average ticket will go up. i disagree with vockers infrastructure argument, in the case of san diego, if you build new highways, and a new airport you simply open the doors to more urban sprawl, more people, more financial burden on the city, which cant handle the infrastructure is has now. and the charger stadium is the turd in the punch bowl.
Corruption.
So, U.S. Federal finances are replete with truth and integrity?
Corporate finances?
Personal finances as represented on an application for a car loan?
I find it amusing, to my macabre sense of humour, how someone who was the symbolic figurehead of the single greatest insitutionalized form of fraud would cast aspersions upon anyone else! Only in a world already almost totally dominated by triumphantly ENFORCED FRAUDS could anyone refer with a straight face to the "highly regarded former chairman of the Federal Reserve, Paul Volcker."
I regard that above to be nothing more than a cruel joke, considering who is making those statements, and therefore, that is supposed to be respected as an authority! Hah!
"The Volcker Alliance to focus on reforming democracy in the U.S" is necessarily based upon BULLSHIT "reforms."
The fish has rotted from the head. The foundations of the whole system are ENFORCED FRAUDS. There can not be any possible "reforms" that are adequate that keep those same foundations. Rather, there should be intellectual scientific revolutions, in order to enable sufficiently adequate resolutons of the real problems: governments are necessarily the biggest forms of organized crime, controlled by the best organized gang of criminals, the biggest gangsters, the banksters, while an intituition like the Federal Reserve Board is the American King of Fraud, which is integrated into a globalized system, with the Bank of International Settlements being the King of Kings of Fraud.
IF one proposes realistic resolutions of the real problems, then those must necessarily be better organized crime as the only basis for better government, because government is necessarily based upon the principles and methods of organized crime. OF COURSE, U.S. State Finances Lack “Truth and Integrity!” However, that is many orders of magnitude worse than anyone like Volcker would ever publicly admit, because the entire political economy is based upon integrated systems of legalized lies, backed by legalized violence, which is, in turn, WAY WORSE, because the entire history of Neolithic Civilizations' social pyramid systems was based upon successfully being able to back up lies with violence for thousands of years. Furthermore, that is, in turn, WAY, WAY, WORSE, because of the basic driving mechanisms of natural selection pressures, which selected for human artificial selection systems to become based upon backing up deceits with destruction, which morphed into enforcing frauds, for necessarily existing reasons, regarding how and why that happened ...
P.S.
Regarding state finances being deliberately fraudulent and as misrepresented as possible:
http://cafr1.com/
+1 RM. why all of a sudden are having this rash of "truthiness" from Volcker, Greenspan and others in recent weeks and months?
I think that the strand of economists that believe they can control everything, later recognizes their arrogance. Everything they try and control is worse than if they had just let it go....
Great question, SillySalesman, I WISH I knew the answer, but I can only speculate ...
I like the quip by Mark Twain, that the best liars believe their own lies. It takes quite skillful management of cognitive dissonance to remain willfully blind towards things that should provoke one to investigate. In my view, things are objectively getting so blatantly bad that some of the people who were inside instituions such as the Federal Reserve Board are beginning to doubt their own bullshit. However, it is impossible for me to fully comprehend how the best professional liars and immaculate hypocrites were selected and promoted to do their kinds of jobs, within the established systems, and how they were able to rationalize and justify that to themselves.
Thank you GoldCore,
I wish I could get all my news from some fucking stupid gold salesmen. Does your riviting article mean I should buy some gold?
https://www.youtube.com/watch?v=kgoFcyttk-s
Wasn't he the last non Chosenite FED Chair?
Nope, he was a JEW too!
http://www.ynetnews.com/articles/0,7340,L-3619625,00.html
No. I currently believe this to be correct,
but, my links to that have been broken:
The relevant historical developments regarding the FED have been presented by people like Griffin and Quigley, The Creature from Jeckyll Island, and Tragedy and Hope, etc. ...
(Although, these days I regard that more as archeology than history, because the current systems of globalized electronic frauds, backed by atomic bombs, have surpassed by many orded of magnitude the older systems of paper frauds, backed by gunpowder.)
Thanks for the confirmation Roanman, as you said, when I posted my comment above I also implied that "I believe this to be correct, I didn't check it."
One of my favourite statements about the Federal Reserve Board was where Griffin lists all of the things that the Fed was supposed to do, and then lists all of the things that it actually did, which are, of course, totally opposite, and not by accident.
Some of my favourite quotes to put the Federal Reserve Board in its historical global context were those made by Carroll Quigley:
"powers of financial capitalism
had another far-reaching goal,
nothing less than to create a
world system of financial
control in private hands
able to dominate the
political system of
each country and
the economy of
the world as
a whole ..."
That system was "to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements. ...The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. ... It must not be felt that the heads of the world's chief central banks were themselves substantive powers in world finance. They were not. Rather they were the technicians and agents of the dominant investment bankers of their own countries, who had raised them up, and who were perfectly capable of throwing them down. The substantive financial powers of the world were in the hands of these investment bankers who remained largely behind the scenes in their own unincorporated private banks. These formed a system of international cooperation and national dominance which was more private, more powerful, and more secret than that of their agents in the central banks."
Central bankers work like organized crime works.
The point of view which I promote regarding that is that we should start using UNITARY MECHANISMS regarding those isues, instead of continuing to rely upon the DUALITIES expressed as false fundamental dichotomies and the related impossible ideals.
"The absolute best controlled opposition is
one that doesn't know they are controlled."
-- Cognitive Dissonance
Virtually all of the content on Zero Hedge is STILL controlled opposition, in the sense that Cognitive Dissonance stated, (including even him too.) The theoretical ways out of that depend upon enough people perceiving politics is radically different ways. However, there are no good reasons to believe that is politically possible.
I REPEAT, because it is worth REPEATING:
There EXIST globalized systems of electronic frauds, backed by atomic bombs, which serve social pyramid systems based on ENFORCING FRAUDS. There is practically nothing in politics today that is even remotely close to being consistent with the physical science that made electronics and atomic energy possible to develop. The political economy discussions in the mainstream are utter bullshit, while those on Zero Hedge tend to still be superficially correct analysis, followed by superficial "solutions," because almost all the content on Zero Hedge continues to ILLUSTRATE controlled opposition, that does not know it is controlled, because it continues to mostly take for granted the language that it uses, as well as the mainstream philosophy of science it presumes upon.
That is the world in which I am attempting to promote ideas which are theoretically sufficient to adapt to the existence of globalized electronic frauds, backed by atomic bombs. HOWEVER, it appears to be practically a waste of my time. I write long comments in order to adequately develop the background behind my presentations, because what I have to say is NOT something that most people already know about, nor have ever even begun to think about. Yet, the tragic truth appears to be that we have collectively run out of time to adapt. The established systems based on being able to continue to ENFORCE FRAUDS have only been "adapting" by getting better at being able to ENFORCE FRAUDS, while their fundamental fraudulence has driven civilization as a whole to to become more psychotic and criminally insane.
American political problems can be metaphorically described as the result of a prolonged HOME INVASION. The best organized gangs of criminals were able to apply the methods of organized crime to the political processes, in order to effectively privatize public powers. That has resulted in a cascade of consequences down through the Federal Government of the USA, throughout all the states, repeating the same fractal patterns that Lack “Truth and Integrity.” However, around that core of organized crime there are surrounding layers of controlled opposition, and indeed, there is NO publicly significant opposition that is not controlled. They are especially controlled by the ways that they think, which take for granted false fundamental dichotomies, and therefore, propose impossible ideals as the basis for their bogus "solutions," which always backfire badly. They ARE controlled opposition, after all, and therefore, their "opposition" causes the opposite to happen in the real world! The same as everything that the Fed was supposed to do, compared to everything that it actually did, were totally opposite, so too, the controlled opposition to the Fed similarly promotes backward and absurd "solutions."
That is the context in which an organization made by a previous Federal Reserve Board Chairman could promote "reforms" of democracy, when, IN FACT, the American democratic republic and rule of law is about 99% DEAD, as demonstrated to anyone who thinks about the degree to which the public "money" supply has been privatized. Furthermore, there are NO politically possible solutions due to the original causes, namely, THE FUNDING OF POLITICS, continuing to get worse, faster ...
In that context, the only hopes are irrational, while the trajectory towards tragedy accelerates. There can be no workable "reforms." There has to be some kind of "revolution." What I promote is it should be based upon a series of intellectual scientific revolutions, so that political science can surpass the paradigm shifts already achieved in physical science. However, at the present time, the basic ways that money is measurement backed by murder have become electronic and atomic, while the various old-fashioned religions and ideologies that dominate politics continue to deliberately ignore that, and moreover, it is most practical, given those social facts, to continue to delbierately ignore that!
A man with honour.
Yeah - well I notice he's chastising state governments - as if somehow the Federal government is role model of some sort..
He's smart. He knew Nixon coming off the gold standard threatened the end of the dollar and he saved it, but to what end? So we could live in the fiat house of cards?
Volker's is a lonely cry in the wilderness. Things can't continue, but everybody is stretching things out as long as possible in hopes that somebody else will eat that giant shit sandwich, but they had better start thinking about the proper condiment to go with fresh, artisanal shit....
Maybe thats why Obama let open homosexuals in the military?
Research does show that the average male homosexual ingests over an ounce of fecal matter annualy..and that's not including the intentional log eaters!