"We've Reached Never, Never Land" - Missing $21 Trillion - Part 1
For the last two decades, Catherine Austin Fitts, former Assistant Housing Secretary of HUD has been warning that our government has and still is being looted since at least 1997. Despite Fitts' efforts to make the public aware of the United States government losing trillions of dollars from the Departments of Defense (DoD) and Housing and Urban Development (HUD), the mainstream media failed to cover the missing money.
The first public governmental admission of missing money from the Department of Defense came from former Secretary Donald Rumsfeld who stated on September 10, 2001 that there was $2.3 Trillion that was unaccounted for in the DoD. Then conveniently, the very next day the attacks of September 11 including the attack on the Pentagon caused most people to forget Rumsfeld's startling admission.
There was a blip on September 10, 2001, when Secretary of Defense Donald Rumsfeld admitted that DOD was missing $2.3 trillion for the year before. Recognition of this loss was, of course, erased by the events of 9/11, the very next day.
The response was to increase appropriations to the Department of Defense rather than to enforce the Constitutional provisions that spending must be envisioned by Congressional appropriations or the Legislative provisions that require regular published audited financial statements.
Until relatively recently, Fitts believed that the total amount that had been unaccounted for from the Department of Defense and HUD was $12 Trillion. This was based upon what are listed as undocumentable adjustments in internal documents of those departments. That changed when Dr. Mark Skidmore became involved.
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 $120 billion budget, that meant unsupported adjustments were 54 times spending authorized by Congress. Typically, such adjustments in public budgets are only a small fraction of authorized spending.
Upon reading about Fitts' concern for missing trillions from governmental accounting, Dr. Mark Skidmore, Michigan State professor of eoconmics, originally thought that Fitts had made a mistake and had meant to say $6.5 Billion instead of $6.5 Trillion. However, upon reading the report himself, he realized Fitts was correct.
Skidmore then contacted Fitts with the idea of assigning his graduate students the project of delving deep into all the government's own internal accounting reports in an attempt to account for the missing $12 Trillion. Fitts agreed. In 2016, Skidmore assigned two Michigan State graduate students to research all undocumentable adjustments in both the DoD and HUD dating back to 1978. Upon completion of the project in early 2017, much to the shock of both Fitts and Skidmore, the actual number of undocumentable adjustments was $21 Trillion, nearly double that of Fitts' original estimate of $12 Trillion.
While nearly all of the mainstream media has ignored this story of the missing $21 Trillion, in December 2017, Forbes published a guest article co-written by Lawrence Kotlikoff and Mark Skidmore titled "Has Our Government Spent $21 Trillion of Our Money Without Telling Us?"
Meanwhile, comedian and activist, Lee Camp picked up on the story and featured it on his show, Redacted Tonight.
[video:https://www.youtube.com/watch?v=ybgfY2XRAlg]
Camp's publicizing the story brought the debunkers out of the wood work. First, David Norquist, Comptroller with the Department of Defense appeared before Congress to explain how the missing money was simply due to problems with the accounting systems used by the Department of Defense. This was followed by an article in Metabunk.org which attempted to debunk the idea that the money was missing. If you go to this link, be sure to read the comments following the article.
As a follow up to the Norquist hearing, co-authors Lawrence Kotlikoff and Mark Skidmore published a second article in Forbes rebutting the information provided by Norquist, specifically the 6.5 Trillion that has been unaccounted for by the Army.
Given that the entire Army budget in fiscal year 2015 was $120 billion, unsupported adjustments were 54 times the level of spending authorized by Congress. The July 2016 report indicates that unsupported adjustments are the result of the Defense Department's "failure to correct system deficiencies." The result, according to the report, is that data used to prepare the year-end financial statements were unreliable and lacked an adequate audit trail. The report indicates that just 170 transactions accounted for $2.1 trillion in year—end unsupported adjustments. No information is given about these 170 transactions.
Here is an interview with Catherine Austin Fitts. She talks about the missing money and a lot of other things tied to that money. If you have never watched her speak, I recommend you do so with this interview. She is an easy listen and makes a lot of sense.
[video:https://www.youtube.com/watch?time_continue=1837&v=w-57aexDfLk]
Comments
Part 1 today and
hopefully, I will post Part 2 either Tuesday or Wednesday.
Frankly, I am not particularly comfortable writing essays that delve into the specifics of economics, but this topic is both frightening and fascinating. Some of the things Catherine Austin Fitts touches on in the video at the end overlap with some of the Q posts. I doubt that she follows Q, but I found that interesting.
Do I hear the sound of guillotines being constructed?
“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy
gulfgal98,
I haven't watched your linked videos yet, but I want to thank you for taking on this subject. I think it may be the reason for the chaotic behavior of our political elite and media, especially for the Russiagate hysteria, which I think is a desperate attempt to save the nuclear weapons industry and its un-monitored budget.
Not only did the 2015-2016 fiscal year $6.5 trillion unaccounted-for by the Army amount to 12 times the entire Defense budget, it also amounted to ONE THIRD of our country's GROSS DOMESTIC PRODUCT - GDP - for that year.
https://en.wikipedia.org/wiki/Economy_of_the_United_States
Thank you for the link
I have been thinking we should try to become somewhat informed about this when they try to destroy Social Security and Medicare under the pretense that we cannot afford it.
We have a right to know where this money is going and why it is not being accounted for properly. Undocumentable adjustments are going to occur, but they should never be on this massive scale we are seeing here. Fitts and Skidmore believe that the number may be even higher due to their inability to get complete documentation for that time period of 1998-2015.
Do I hear the sound of guillotines being constructed?
“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy
This story is more about accounting than economics.
After the story came out, and after Lee Camp featured it, I ran it by Mary Matiella who was running for Congress at the time. She said that it was a misunderstanding and it had to do with intra-governmental transfers, that is, transfers between different departments. I didn't fully understand her explanation, it's complicated stuff, but she assured me that the money wasn't missing, just poorly accounted for, something to do with unsupported transfer vouchers.
We wanted decent healthcare, a living wage and free college.
The Democrats gave us Biden and war instead.
Accounting
Since I do not have a background in accounting or finance, I cannot rebut what your source has said. However the sheer size of these numbers for undocumentable adjustments should cause grave concern. This is not how a business would handle its books nor should it be how the government accounts for its finances and spending.
I did see a video in which Dr. Mark Skidmore does rebut the claim that this is simply an accounting issue. Further, in Part 2, I will try to include some documentation to that effect.
Whatever the reason/rationale, there should never be undocumentable adjustments (write offs?) of this magnitude period. It creates a situation in which theft, corruption, and crimes can be easily hidden. We are paying a lot of tax money to operate these two departments and we should be assured via documentation that our money is being spent properly. The on the books DoD budget is nearly $3/4 Trillion. And we all know that there is a black budget off the books that supplements that.
Do I hear the sound of guillotines being constructed?
“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy
I wasn't suggesting that the accounting is as it should be,
and I know that defense contractors steal. Hell, I'd like to see the "defense" budget cut by 2/3, at least. All I'm saying is that the headline, $21 Trillion Missing at DoD is a bit sensationalized. Next time I see Mary, I'll ask her if she can write up a paragraph or two to help folks like us understand the situation better. Or maybe I'll just email her. Either way, I'll share the results here.
We wanted decent healthcare, a living wage and free college.
The Democrats gave us Biden and war instead.
Hopefully Part 2 may help answer
the questions you raised. I read the link you provided to Mary's Wikipedia bio and it is impressive. But sometimes those closest to an issue do not have the benefit of unbiased hindsight that an outsider does. For the record, I am a retired local government employee.
Do I hear the sound of guillotines being constructed?
“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy
It is exactly how Bisbee is running it's budget.
Well, with a few less zeros.
"I’m a human being, first and foremost, and as such I’m for whoever and whatever benefits humanity as a whole.” —Malcolm X
I’ve heard people dismiss “six million” as an accounting issue,
but in Germany if you do that in public, you can be charged with the crime of holocaust denial.
One needn’t be an accountant to be alarmed at the scope
of the unsupported adjustment of 56 times the entire DoD 2015 budget. So with the waive of a magic accounting wand a discrepancy equal to over half a century’s worth of the entire DoD budget just goes down the rabbit hole? And congress does a collective shrug? WTF, how many years of universal health care would that have paid for? How much free public college tuition?
Unfortunately I suspect that, since detaching ourselves from the Gold Standard, our government simply creates dollars out of thin air. It doesn’t look like stealing, but it is. The actual value of each and every every dollar saved or invested by individuals shrinks as the money supply grows. The interest we plebes earn in our savings accounts does not begun to keep up with the inflation caused by a growing supply of fictitious dollars created out of thin air. “Put your money in the Market” they say, where they just continue to pick your pockets with every “correction”, “recession” or major terror attack.
The government has been fleecing us rubes for a long, long time. Too long. Much too long.
It needs to stop.
Capitalism is the extraordinary belief that the nastiest of men for the nastiest of motives will somehow work for the benefit of all."
- John Maynard Keynes
You make an interesting point
Somehow I missed commenting on your comment so I apologize for the lateness of this reply.
This is a very interesting point and one that was not addressed by the research Fitts and Skidmore did into the missing money. I have read recently that many large governments are building up their gold reserves. If the US dollar ceases to be the reserve currency of the world, what happens next? China is building a new silk road to link to Russia and Europe for trade purposes. Where does that leave the US?
Do I hear the sound of guillotines being constructed?
“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy
Blaming the Gold Standard alone oversimplifies things.
Just as the election of Trump can be seen as the result of a deeper dissatisfaction with the dysfunction of our Representative Democracy, the actual causes of events such as the Great Depression go deeper and involve many other factors besides the switch from a fixed gold standard to a more flexible (and corruptible) system based on the manipulation of the money supply. One such factor in the ‘30’s was growing wealth inequality:
Link
It sounds all too similar to our current situation, doesn’t it? I think we have more than a little reason to fear that we are very much in the lead up to a repeat performance right now.
Capitalism is the extraordinary belief that the nastiest of men for the nastiest of motives will somehow work for the benefit of all."
- John Maynard Keynes
It's becoming pretty clear
By and large, we are just sheep that need to be shorn regularly for our own wellbeing.
If you cannot get the American Sheeple to lift their heads from grazing, the wolves continue to circle and cull the herd with impunity.
I am so ashamed of America.
If you can't beat 'em, join 'em? Is that how we deal with it?
Lie, cheat, steal? Hurt, maim, kill?
And feign piety so you're not recognized as a monster?
Become an Alpha and feed off the beta?
I cry for our children.
Neither Russia nor China is our enemy.
Neither Iran nor Venezuela are threatening America.
Cuba is a dead horse, stop beating it.
Not auditable is missing...
I handled millions in USDOL funds. If I had said I didn't have supporting documentation for my expenditures, I would have been fired and/or put into jail. It is called mismanagement or waste, fraud, and abuse.
"Religion is what keeps the poor from murdering the rich."--Napoleon
@dkmich Well, but you're not well
Well, but you're not well-connected, dk.
Laws are for the little guy.
"More for Gore or the son of a drug lord--None of the above, fuck it, cut the cord."
--Zack de la Rocha
"I tell you I'll have nothing to do with the place...The roof of that hall is made of bones."
-- Fiver
Thanks GG
Defense money has long been a sore spot with me. DoD couldn't find its ass with both hands when it came to their USDoD money; but in the same fiscal year, our USDOL funds were audited by our grant recipient, the State of Michigan, USDOL fed, and our school district who received the funds we managed. If you want to blow up the world, no receipts required. If you want a job or training, document every freaking penny in triplicate. I couldn't resist and would always ask the USDOL if he had any DoD I could trade for.
"Religion is what keeps the poor from murdering the rich."--Napoleon
to me it just shows
how nonchalantly The Gov't
treats money.
Except when earmarked for the 99%.
Then it's, "how are you fucks going to PAY for it??!"
But, $6.5 Trillion missing from the DoD?? No worries! Just an accounting error!
"We'll just add $6.5 Trillion to the "Money In" side of the ledger to balance it.
Done! See?? No problem! Balanced!
And, I would argue, if 'They' can do that magic with DoD spending - and 'They' so obviously can! - then why can't 'They' do the same with $6.5 Trillion earmarked for a bag of goodies (like zero out college loan debt, Infrastructure, Med4All, expand S.S., and... ) for the 99% ??
huh, Congress, huh??
And the answer, of course, is no reason 'They' can't. None.
Except 'They' don't want to.
Becuz, then, what incentive would there be for 99% Slackers to work??! Or so their argument goes. But, if nuthin' else, this little example Totally debunks the "we're broke" argument, therefore, "how are you Libfucks going to Pay for it??!" is moot. And needs to be shot down as moot every time we hear it.
the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.
If everyone got what they needed, what would the system
hold over people’s heads to make them do what the 0.01% want?
Exactly. n/t
the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.
So I just watched
the video link with Catherine Austin Fitts. Wow. Loaded with topics to think about and full of the optimism of necessity, meaning, we have to solve this, and it is a unifying point.
Catherine Austin Fitts
I had heard of her but had never taken the time to watch a video of her until I began working on this essay. Since then, I have watched several videos of her and my takeaway is this. She is politically conservative, but she is a conservative with a conscience. I found her to be optimistic and a believer in the worth of all human beings. She appears to be less bound to ideology than she is to integrity.
Do I hear the sound of guillotines being constructed?
“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy
I found her most
important point to be what is described at this separate link:
Wow!
I wish you were writing this. Thank you for another great link.
I have heard her mention the rape of Russia before when the American corporations swooped in after the fall of the USSR. I believe she said that 100,000 people died as a result of the rape of Russia.
Do I hear the sound of guillotines being constructed?
“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy
Does this include
the shrink wrapped pallets of US currency they brought in on transport planes in Iraq? Nah, they know where it all went.
Yes, I agree
that the pallets of shrink-wrapped cash we air lifted to Iraq are worth talking about and investigating. In some respects, all of this mayhem, including 9/11 itself, can be seen, if you want to look at it differently, as a great planes robbery, a heist of gargantuan proportions.
Not to mention
WTC bldg. 7 Was occupied by the Secret Service, IRS, CIA and yes The DOD. I know, It's either CT or just a coincidence.
Just *mentioning* WTC 7 makes one a CTer these days
That’s how successful the psyops have been.
Thanks gg. Fascinating. In a plane wreck kind of way.
A truth of the nuclear age/climate change: we can no longer have endless war and survive on this planet. Oh sh*t.
Stupid question here
I do not understand how you can lose more money than you have. If I have $100, I can misplace it. But I cannot misplace $500 because I only had $100.
This is the accounting
mumbo jumbo that the US government is using to try to explain it. The problem is where did the money come from and where did it go? And they cannot explain that either.
One possible explanation is a black budget that no one knows about, but that would be unconstitutional since Congress is supposed to approve all budgets. Another potential explanation is that this money is coming from unsavory sources such as drugs, weapons sales, or human trafficking.
Whether this is simply an accounting issue, a black budget issue, off the record sources of money, or writes offs of some sort, the sheer enormity of it begs investigation.
Do I hear the sound of guillotines being constructed?
“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy
Yes, it certainly does beg for investigation.
Thank you for bringing this to our attention.
Your question, Granma,
is anything but stupid. We have no answer to the basic question, "What are we talking about?"
Is there a record of $6.5 trillion in expenditures by the Army for fiscal 2015-2016 but no receipts? No accounting? Confusing accounting? Double accounting? Chaotic accounting? What? Where does the number 6.5 trillion come from?
The response that's supposed to mean there's no problem here is that the DoD is too big to audit, that's why it's never been audited. Too big. Too busy. Too complex.
To which I think the taxpayers have a right to say, TOO CORRUPT. And that cannot be a good thing in our supposed department of defense.