Monday, June 28, 2010


Starting with the Homeland Security probe at Washington's Reagan Airport, arrival back in the United States resembles an alien abduction to a planet of bright lights, strange beings and incomprehensible behavior. The featureless mysophobic landscape of DC's Virginia suburbs seems to indicate that homogeneity and sterility are the native religions. Especially after spending eight months in Mexico's pungent atmosphere of funky, sensual open air markets, rotting vegetation, smoking street food grills, sweat, agave nectar and ghost orchids.

The uniformity on Planet Norte is striking. Each person is a unit, installed in life support boxes in the suburbs and cities; all are fed, clothed by the same closed-loop corporate industrial system.

Everywhere you look, inhabitants are plugged in at the brainstem to screens downloading their state approved daily consciousness updates. iPods, Blackberries, notebook computers, monitors in cubicles, and the ubiquitous TV screens in lobbies, bars, waiting rooms, even in taxicabs, mentally knead the public brain and condition its reactions to non-Americaness. Which may be defined as anything that does not come from of Washington, DC, Microsoft or Wal-Mart.

For such a big country, the "American experience" is extremely narrow and provincial, leaving its people with approximately the same comprehension of the outside world as an oyster bed. Yet there is that relentless busyness of Nortenians. That sort of constant movement that indicates all parties are busy-busy-busy, but offers no clue as to just what they are busy at.
We can be sure however, that it has to do with consuming. Everything in America has to do with consuming. So much so that we find not the slightest embarrassment in calling ourselves "the consumer society." Which is probably just as well, since calling ourselves something such as "the just society" might have been aiming a bit too high? Especially for a nation that never did find enough popular support to pass any of the 200 anti-lynching bills brought before its Congress (even Franklin Roosevelt refused to back them).
On the other hand, there is no disputing that we do reduce all things to consumption. Or acquiring money for consumption. Or paying on the debt for past consumption. It keeps things simple, and stamps them as authentically American.
For example, now faced with what may be the biggest ecological disaster in human history, I'm hearing average Americans up here talk of the Gulf oil "spill" (when they speak of it at all -- TV gives the illusion those outside the Gulf region give a shit), in terms of its effect on: (A) the price of seafood; and (B) jobs in tourism and fishing. Only trolls stunted by generations of inbred American style capitalism could do such a thing: reduce a massive ocean dead zone to the cost of a shrimp cocktail or a car payment.
Meanwhile, even as capitalism shows every sign of collapsing upon them under the weight of its sheer non-sustainability, Norteamericanos wait like patient, not-too-bright children for its "recovery." Recovery, of course, is that time when they can once again run through the malls and outlet stores, the car lots and the fried chicken palaces eating, grabbing and consuming. No doubt, something resembling a recovery will be staged for their benefit, thereby goosing their pocketbooks at least one more time before the rest of the world forecloses on the country.
Let 'er rip! There's plenty more where that came from
On Planet Norte nothing is finite. Not even money, which, under the flag of the consumer society, you can keep borrowing forever. Equally limitless is oil, infinite quantities of which are being hidden from us by a consortium of energy companies. Several people here in the States have told me that the size of the Gulf oil spill is proof that there is plenty of oil in still in the ground, and that this "peak oil stuff" is a scare tactic, an excuse to keep the price up. They were dead serious.
Considering the inexhaustibility of Planet Norte, it's no surprise its inhabitants have never doubted the "American Dream," the promise that every generation of Americans can be fatter, richer and burn up more resources than the previous one, ad infinitum.
All of which makes folks like me, and probably you too, want to run pulling out our hair and screaming, "What the fuck has happened to these people? From the start, it was clear that Americans were never going to win any prizes for insight. But this is ridiculous. Is it the hormones in the meat? Pollution? A brain eating fungus? How on God's (once) green earth can a nation so frigging 'out of it' manage to survive each day -- much less constitute an ongoing threat to the rest of the world?"
However, you must hand it to us that, so far, we have managed to sustain this culture of "I want it all, everything, the whole shebang, and I want it right now!" Except for the liberal and leftie websites and organizations, few seriously question it. When your designated role as a citizen is to live out a round-the-clock materialistic wet dream, why would anybody want to question it? Besides, seeing is believing. So reality is a titty tuck or a Dodge truck, and Ruby Tuesday delivering "falling off the bone tender" manna 24/7. Thank God It's Friday and go ahead, do it, put another trip to Cancun on the plastic. It's a limitless world, baby!
In my little casita back in Mexico, limits are very real. Because price per unit escalates with increased usage, we have to pay serious attention to electricity. So does government. Our municipality is so conscious of every kilowatt that traffic lights have no green or orange phase -- which saves on expensive bulbs too -- and it seems to work out just fine. You get one streetlight per block. Water is available to our village's neighborhoods only every other day, so it has to be stored in rooftop tanks. Once in the tank, gravity eliminates the need for further electric pumps. Every single plastic bag, large or small, is used for household trash, then hung on the front gate to be collected. You accept limits every day in Mexico and live within them.
But for that twenty percent or so of the planet living in the (over) developed western nations -- thanks to colonial plundering for resources, and later, world banking scams -- the limits of the natural world have never sunk in. Not really. Oh, ecological limits can be intellectually real to us, and we can have discussions about them. And being comparatively rich, we can build wind turbines and solar panels, and tell ourselves smug lies about "sustainable energy" and "green solutions." However, in our daily world, the affective one that governs our behavior, the one that tells us what we honestly need to deal with and what we do not, there are no apparent limits or potential end of anything. For example, if you wanted a glass of ice water right now, you could walk over to a refrigerator and get it. Most of the world cannot.
We assume much. We assume that when we get up every morning the coffee maker will come on and the car will start. We assume that everything imaginable is available for a price, even if we cannot come up with that price. But we never really worry about having food or clothing, other than its style and type. Our biggest concerns turn on such things as who will win the World Cup or be eliminated from American Idol. The social and political environment assures us to believe we can afford to be consumed by these trivialities. The world of Americans has been like that for generations. So how could it possibly come to an end? Lest one have doubts, every voice of authority tells us that no matter how bad things may seem at times, they always "return to normal."
This theme of engorgement and spectacle endures, thrives really, year after year, despite even the slowly unfolding world economic collapse. But it is Americans in particular who become stupider by any historical measure of intelligence. Millions pay money to visit Branson, Missouri. Or Holy Land Christian Theme Park, in Orlando, where you can have the improbable experience of "fun with the world's most popular Biblical characters" (Hmmmm, maybe Mary Magdalene) and watch Jesus get crucified daily. And just when you think you've seen every possible insult to the democratic process a degraded society can vomit up, some new one comes hurtling in your direction. Like those fat women in pink sweatpants leering from our TV screens, dangling teabags and vowing revenge for they know not what.
For a thinking person, a low-grade depression settles in, alongside an unspoken fatalism about the future of the human race, particularly the American portion. That's the point I reached a year or so ago. I would probably be ashamed to admit it, if I did not receive hundreds of emails from readers who feel the same way.
If nothing else though, in the process of building our own gilded rat cage, we have proven that old saw about democracy eventually leading to mediocrity to be true. Especially if you keep dumbing down all the rats. After all, Dan Quayle, Donald Trump and George W. Bush hold advanced degrees from top universities in law, finance and business. The head rats, our "leaders," (if it is even possible to lead anybody anywhere inside a cage), have proven to be as mediocre and clueless as anyone else. Which is sort of proof we are a democracy, if we want to look at it that way. While it is a myth that virtually anybody can grow up to be president, we have demonstrated that nitwits have more than a fighting chance. During my 40 years writing media ass-wipe for the public, I have interviewed many of "The best of my generation", and believe me; most of them were not much.
Naturally, they believe they are far superior by virtue of having made it to an elevated point in the gilded cage, closer to the feed, water and sex. Because they believe it, and the media echoes their belief, hovering and quoting them, discussing their every brain fart, we tend to believe it too. Nothing shakes our belief, not even staring directly into the face of a congenital liar and nitwit like Sarah Palin, or a careening set of brainless balls like Donald Trump or a retarded jackal like George W. Bush. Americans are unable to explain why such people "rise to the top" in our country. We just accept that they do, and assume that America's process of natural selection -- survival of the wealthiest -- is at work. These people are rich; therefore, they should run the country. God said so. It's a uniquely American principal of governance, which in itself, makes the case for our stupidity.
If it's control you want
Yet, despite such intellectual and moral torpor, some of the numbest bozos are beginning to suspect that the wheels are coming off their "have everything" society. One clue is that every time they check, they have less than before. "There's other signs too," concludes our bozo. "You gotcher radical Muslims blowing shit up, or plotting to. China holds the mortgage on our asses. Who wuudda ever thunk it? The bodies of our fallen heroes are being tossed out of the revered Arlington Cemetery into the landfill. You got yer freshwater fish with three eyes, obese high school kids droppin dead of heart attacks, meth epidemics out in the boondocks and wild coyotes moving into big cities. It's all just too godamned much!" And so, right in the middle of the morning commute, our bozo pulls over onto the roadside berm, puts his hands up against the windshield and screams. "AAAAAAAGH! Is anybody in control here, for Christ sake?"
Control huh? Nothing could be easier to obtain. Just sit back allow those who want total control of the government to have it. The GOP is sure to come up a candidate willing to pistol whip this country into shape. And that solution looks more attractive by the day. As violent competition for survival increases and resources diminish, the public demands more government control. Control of borders, drug lords with entire armies of their own, pillaging by banks. Who else but the government is capable of beating all those sociopathic freaks out there into submission?
No less a personage than Thomas Jefferson pointed out that, whether for good or evil, controlling the people is the main thing all governments do best. Both Jefferson and Stalin understood this. They also understood that government control is a one-way street -- it never voluntarily contracts, never shrinks. Government grows incrementally in the best of times, and balloons exponentially during the worst. When the people are anxious or fearful, when the have-nots are coming out of the woodwork for their share and there is genuine risk of losing something, the citizens always demand more government control. Given enough time, all government control, regardless of type or stripe, metastasizes -- whether it be into the religious control of a theocratic state, or the democratic totalitarianism of the United States.
Although totalitarian democracy is well solidified in the U.S., it is difficult, if not impossible, for its citizens or the outside world to name the beast, due to the outward appearance of freedom. Petty liberties are left intact. The process of orderly elections is maintained, thus retaining the world's general respect as a free country. After all, the people do "exercise their will" by voting.
Beyond that, the people have no further participation in, or effect upon the government's decision-making process regarding the public's will. From that point onward, an economic, political, and military élite interpret the general will as what best fits their own interests. A media elite then sells their decisions, such as war or destruction of the social safety net as the people's choice. Wars are packaged and marketed as "Operation Iraqi Freedom," fought by "our heroes." Policies kicking the slats from under the old, the poor and the weak are sold as "eliminating wasteful, unfair entitlements," such as elder care and child nutrition. Everybody knows that words such as entitlements, elder care and child nutrition are code words in capitalism speak. Elder care wastes money on worn-out old fuckers who can no longer work and pay their own way. Child nutrition is just a nigger/wetback feeding program that causes them to multiply even more, draining off valuable funds the already rich could have put to better use.
Liberty nonetheless abounds in a totalitarian democracy. Open elections verify majority rule. The slaves are free to elect their masters, and that is enough to satisfy most folks in the land of the free. That, along with 100-plus cable channels to keep us entertained inside the cage. We know we are powerless, but better the devil you know than evil socialism, where you are not allowed to take out a second mortgage on your cage.
What's a little totalitarian oppression, anyway?
In the big picture however, the hardening of our totalitarian state is a piffle, compared to what drives the people to accept such a state. That driver is the escalating social pressures of six billion humans, and the ecocide caused by our disastrous hydrocarbon culture. Would that the state and its media allow the public enough information to make the connection between things like global warming, peak oil, desertification and the state's wars we pay for and die in.
From the dawn of agriculture, human civilization has been a net subtraction from the environment on which we depend for life. Consider what once existed, and what little of it is left. Consider the burgeoning hordes everywhere burning, smelting, polluting, and generally devouring what remains. Where is that leading us?
You don't need to call the Harvard's environmental science department for the answer (even though the profs and scientists there maintain the charade that we do, to protect their rackets). Despite the rule of scientism and the fashionable modern disdain for human intuition, common sense is still a viable option. Does common sense and experience tell you that all six billion of us are suddenly going to come to Jesus and save the planet? Suddenly be seized by the spirit of universal cooperation and pagan love for Gaia? Are those billions going to quit doing what our species has done for 15,000 years -- attacking nature first with the stone axe, then the plow, and later with atomic energy?
Call me a grim old fatalist, but I just do not see the human race turning things around. Not because humans are inherently evil (although pimping Gaia to death comes close), but because we are what we are. In any case, we are not going to stop eating, shitting, burning up stuff to stay warm, or following the genetic imperative to breed. How can we solve the problem when we are the problem, other than by self-extinction?
So here it is, top of the ninth round, and Gaia is on the ropes with cuts over both eyes, and no referee on the mat. Homo sapiens are moving in for the killer punch. It's been an ugly fight. But the truth is that there will be no winner. Certainly not man, considering that his triumph results in the specter of human self-extinction, dieback or die-off, or at least by massive die-back.
Turn off your mind, relax and float down stream
Informed and globally conscious people are sickened, heartbroken by the spectral truth. But to use the same Neal Cassady quote for the second time this year: "To have seen a specter is not everything.
In fact, it even has a good side. Transformation. Once you honestly accept what you have seen, you are changed, released from the previous stress and fear. Like so many feared experiences, it is its own psychodynamic, and is about "coming out the other side" of the experience. Accepting such a truth -- especially for pathologically optimistic, cheer stressed Americans -- shatters many painfully held illusions. The chief one is that we are the animating force behind all significant change, and that the massive damage we do is "progress"). In their place grows a new inner awareness. Although it does not conform to any popular definition as such, the easiest way to describe it is "spiritual," Who in these times, you may ask, believes in the spirit as an animating force of mankind? My answer is: Those who can be still enough to see that spirit moving.
With it comes the awareness and acceptance of forces far more powerful than our puny anthropocentric illusions of planetary authority. We can arrive at this understanding by way of thinking, logic and reason. The mind is a cumbersome and inefficient way to go about escaping traps you build with your mind, but yes, it can be done. Most educated people in this science worshipping age prefer the convoluted path of logic and rational exercise, over calmly opening one's eyes and heart to the world before us, as wiser men have done for thousands of years.
I can see why. Pay the money and put in enough university time, and it's relatively easy to end up certified, acceptable, and equipped with the professional jargon necessary to impress yourself and others that you are an expert of some sort. One of society's answer guys, the kind universities and corporations pay good money to own. But it's downright hard to be calm, to maintain inner stillness. Beyond that, inner stillness does not much impress or frighten others in the rat fight for a good spot at the feeder. Worse yet, it's free. No money it.
But stillness of mind opens onto the fathomless void, where we are dwarfed into utter insignificance. It makes clear how little we comprehend -- how much we do not know and never will, and that the greater the fire we build, the more darkness is revealed.
Edwin Arnold reminds us that when it comes to sinking the string of thought into that fathomless void, "Who asks doth err, Who answers, errs more," because, as any searcher by way of mortal mind discovers:
Veil after veil will lift -- but there must be
Veil upon veil behind.
Either way, there never was any guarantee that we would like the universal truth. And the truth is that the universe is busy enough hurling toward its destiny, and does not give a rat's ass what we do or do not like. Or whether a smear of biology on a speck of cosmic dust manages to poison itself to death.
So stay strong. Transcend. Find reasons to love.
Nobody ever gets out of this world alive, anyway.


Joe Bageant is the author of Deer Hunting with Jesus: Dispatches from America's Class War. His newest book, Rainbow Pie: A Redneck Memoir, deals with America's permanent white underclass, and how it was intentionally created. To be released in September in Australia and October in the United Kingdom. Rainbow Pie is available for preorder from Amazon-UK and Amazon-Canada. In Australia, the book may be pre-ordered at Scribe Publications.


Today, 1.2 million jobless workers lose their extended unemployment insurance (UI) because some Senate millionaires think a $300 a week unemployment check will make people too lazy to look for a job. This group also is pushing to reduce the nation’s budget deficit rather than use short-term spending to create desperately needed jobs for the nation’s 26 million unemployed or underemployed workers.

Three things:

* The Senate yesterday failed for the FOURTH time to extend UI because Senate Republicans are blockading the bill. Economists say extending UI is fiscally prudent and essential to improve the faltering economy. Several hundred thousand more unemployed workers will lose their UI each week in addition to the 1.2 million jobless workers who already have.

* While more than 15 million U.S. workers can’t find work because there’s five workers for every one job opening, the rich are getting massively richer. The ranks of the nation’s millionaires rose 16.5 percent, to 2.87 million, last year. Their total wealth in North America rose 17.8 percent, to $10.7 trillion.

* A new poll shows the majority of the U.S. public wants government to take a larger and stronger role in making the economy work for America’s workers. Nine out of 10 agree that government and corporations should join with individuals to place the common good above greed. Another poll, by the Alliance for American Manufacturing, shows nearly three of five respondents (58 percent) say the United States no longer has the world’s strongest economy, compared with 36 percent who believe otherwise.

So, in short: Republicans in Congress are out of touch with the American people and are working with the growing group of millionaires—like coal mine owner Don Blankenship of Massey Energy Co. and BP CEO Tony Hayward—to ride roughshod over those whose sweat and hard work built this nation.

Some say the United States is now a corporatocracy.

Who in Congress is willing to prove otherwise?

Wednesday, June 23, 2010


Study says Portland not a 'manly' city

by Teresa Blackman, staff

Posted on June 23, 2010 at 10:49 AM

PORTLAND – Portland is one of the nation’s least “manliest” cities, according to an annual ranking just released by Mars Chocolate North America.
The COMBOS® “America’s Manliest Cities” study ranked 50 major metropolitan areas, using criteria that included the number of home improvement stores, steak houses, pickup trucks and motorcycles per capita.
Portland apparently doesn’t have enough man-tractions, because the Rose City dove down to the lowest spot in the top-50 ranking. Charlotte, N.C. earned top bragging rights for the No. 1 spot because of its “manly lifestyle, manly retail stores, manly occupations and salty snack sales categories,” according to a spokesperson.
Here is the complete list:
1. 2010 “America’s Manliest Cities” Rankings Charlotte, NC (▲ 1 spot)
2. Columbus, OH (▲ 5 spots)
3. Kansas City, MO (▲ 5 spots)
4. Nashville, TN (▼ 3 spots)
5. Baltimore, MD (▲ 32 spots)
6. Milwaukee, WI (▲ 11 spots)
7. Chicago, IL (▲ 39 spots)
8. Indianapolis, IN (▲ 1 spot)
9. Washington, D.C. (▲ 36 spots)
10. Philadelphia, PA (▲ 20 spots)
11. Denver, CO (▼ 6 spots)
12. St. Louis, MO (▼ 6 spots)
13. Columbia, SC (No Change)
14. Harrisburg, PA (▲ 12 spots)
15. Cleveland, OH (▲ 4 spots)
16. Orlando, FL (▼ 2 spots)
17. Salt Lake City, UT (▼ 1 spot)
18. Birmingham, AL (▲ 5 spots)
19. Detroit, MI (▲ 1 spot)
20. Cincinnati, OH (▼ 16 spots)
21. Richmond, VA (▼ 9 spots)
22. New Orleans, LA (▲ 5 spots)
23. Phoenix, AZ (▼ 1 spot)
24. Houston, TX (▲ 15 spots)
25. Oklahoma City, OK (▼ 22 spots)
26. Toledo, OH (▼ 16 spots)
27. Minneapolis, MN (▼9 spots)
28. Memphis, TN (▼ 17 spots)
29. Louisville, KY (▲ 2 spots)
30. Seattle, WA (▲ 10 spots)
31. Boston, MA (▲ 7 spots)
32. Atlanta, GA (No Change)
33. Providence, RI (No Change)
34. Dayton, OH (▼ 19 spots)
35. New York, NY (▲ 15 spots)
36. Jacksonville, FL (▼ 15 spots)
37. Pittsburgh, PA (▼ 8 spots)
38. Grand Rapids, MI (▼ 14 spots)
39. Dallas, TX (▼ 5 spots)
40. Rochester, NY (▼ 4 spots)
41. Las Vegas, NV (▼ 13 spots)
42. San Diego, CA (▲ 1 spot)
43. San Francisco, CA (▲ 5 spots)
44. Tampa, FL (▼ 19 spots)
45. Sacramento, CA (▼ 4 spots)
46. Buffalo, NY (▼ 11 spots)
47. Oakland, CA (▼ 3 spots)
48. Los Angeles, CA (▲ 1 spot)
49. Miami, FL (▼ 7 spots)
50. Portland, OR

Sunday, June 20, 2010



TO: Representative Bruce Hanna
R-Roseburg - District 7
900 Court St. NE, H-395
Salem, OR 97301

Tel. (503) 986-1407

Rep. Hanna:

The following is an Audit Review of the 2003 Oregon CAFR (10.9 billion potential surplus identified)

In your recent statements ( Your comments from the OR House floor - ) per OR identifying "a" surplus revenue source from within the CAFR, the following is a more in-depth "Comprehensive" review of Oregon's State 2003 CAFR

An audit of the 1,000 + "other" local government's CAFRs "in" Oregon that are separate from the state report would dwarf the 10.9 billion dollar potential surpluses shown for and from the State level Government accounting.

Please share this communication with your other members of the house and your press contacts for their review.

Sent FYI from,

Walter Burien -
P. O. Box 2112
Saint Johns, AZ 85936

Tel. (928) 445-3532

Review of The State of Oregon CAFR- FY 2003 (Exhibit A)

CAFR PageList of Investments By Fund
(In thousands - add three zeros)
Governmental Funds and Activities:
28 General22,732
28 Health and Social Services249,741
28 Public Transportation527,271
29 Environmental Management277,453
29 Education Support52,811
Special Revenue:
102 Agricultural Resources12,064
102 Business Development157,255
102 Community Protection78,295
103 Consumer Protection129,185
103 Employment Services285,057
103 Nutritional Support5,394
103 Residential Assistance66,627
103 Other Special Revenue78,718
Debt Service:
104 Revenue Bond Fund72,556
104 Certificates of Participation243
104 General Obligation Bond4,732
104 General Appropriation Bond17,274
Capital Projects:
105 Capital Projects35,584
Permanent Fund:
105 Education Endowment
105 Housing Guarantee17,574
105 Other Permanent9,687
Proprietary Funds:
Enterprise Funds:
36 Housing and Community Services805,685
36 Veterans' Loan816,047
36 Lottery Operations312,550
37 Unemployment Compensation1,373,897
37 University System617,598
Nonmajor Funds:
112 Energy Loan49,233
112 Water Resources3,482
112 Business Development6,437
113 Special Public Works67,047
113 State Hospitals2,453
113 Liquor Control16,272
113 Veterans' Home479
113 Water51,480
113 Other Enterprise47,795
Internal Service:
122 Central Services233,833
122 Legal Services11,783
122 Banking Services1,772
123 Audit Services1,309
123 Forestry Services3,548
123 Other Internal Service4,592
Fiduciary Funds:
132 Public Employees Retirement
132 Postemployment Healthcare
132 Deferred Compensation
Private Purpose Trust:
134 Common School755,343
134 Other Private Purpose Trust35,674
Investment Trust
138 Agency Funds
Discretely Presented Component Units:
48 SAIF Corporation2,711,499
48 Oregon Health and Science University880,553
Total Surpluses…10,910,614
Per Capita…3,111
Family of 4…12,444

Note: For those familiar with governmental accounting, for surpluses we basically used GFOA Balance Sheet Account Classification Codes 101, 102, 103, 151, 153, and 170.

The State of Oregon as of 2004 at the State-level has approximately $10.91 billion of the taxpayer's money it is not using, i. e. surpluses equal to $3,111 for every man, woman and child in Oregon or $12,444 for a family of 4. This does not include all the additional surpluses that exist in the school districts, cities, or counties in Oregon.

The Exhibit A above shows the results of the FY 2003 review.

What are these surpluses we refer to?

Government surpluses, as used in this report, are funds that are not required or needed for the operation of all government operations, funds, accounts, agencies, etc., directly or indirectly, for the year(s) covered by the budget which is usually one year. Theoretically, at the end of every fiscal year, governments should have little or no cash/investments on hand. But what we have found is that most governments have huge amounts of cash and investments on hand at the end of the fiscal year. And somehow these cash and investments are not being recycled back through the budget process the next year, but are being held year-after-year.

A Government Can Have a Budget Deficits/Shortfalls and Financial Surpluses At The Same Time.

This is the most deceiving topic that governments, politicians, and the news media have conveyed to the public about governmental financial matters. In realty, a government can simultaneously have a budget shortfall and a financial surplus of the taxpayers' money.

The problems are focused in four areas:

1. The budget only covers a small portion of the State's financial condition. There are a group of funds not part of the budget process. The complete list of funds and budgetary requirements are found in the Comprehensive Annual Financial Report (CAFR). This report depicts the complete financial status of the State. The budget only covers a portion of the financial resources of the government.

A Little Background:

The CAFR usually has four categories.

Governmental Funds
Proprietary Funds
Fiduciary Funds
Component Units

Governmental Funds involve activities of the government including most basic services such as environmental resources, general government, transportation, education, health and human services, and protection of persons and property. Most of the cost of these activities are financed by taxes, fees , and federal grants.

Proprietary Funds are used when a government charges customers for the services it provides, whether to outside customers or to other agencies with the state. For example, Enterprise Funds, a component of proprietary funds, are for activities that provide goods and services to outside (non-government) customers, which includes the general public. Fees, charges for services or goods, assessments, fines, licenses, etc. are the major revenue sources.

Fiduciary Funds are activities in which the state acts as a trustee or fiduciary to hold resources for the benefit of others. These funds are pension trust funds, investment trusts, and agency funds (which are for assets held for distribution by the government as an agent for other governmental units, other organizations, or individuals).

Component Units reportedly are legally separated organizations for which the government is financially accountable. Usually fees, charges for services or goods, assessments, fines, penalties, licenses, etc. are the major revenue source.

The budget, as commonly known to the public, only involves the Governmental Funds and may not even include all of the governmental-type funds. The remainder of the Funds shown above are not part of the budget and are commonly called "off-budget" items.

2. Next year's budget consists only of next year's estimated revenues and next year's estimated expenditures. Previous years' revenues not used (spent) are normally not considered in the next year's budget, but should be. In other words, the previous years' revenues (as shown in the CAFR) are not recycled back to the budget process.

Historically, a budget consists of three parts: 1) Funds brought forward (funds not previously spent); 2) Next year's estimated revenues; and 3) Next year's estimated expenditures.

But somewhere along the way the funds brought forwardcategory was lost. In accounting, the previous years' revenues are no longer called revenue but have been converted to Cash and Investments. Since they no longer called Revenues governments have forgotten about them to the public. They are there but not considered in the budget process, but should be.

3. The budgeted items and non-budgeted items (off budget) should be budgeted to zero (usually referred to as zero-based budgeting). In addition, the government should be on a pay-as-you-go basis, no reserves for future years. What this means is that you budget to have a zero fund balance. If you plan to spend $100 you budget for $100 with no excess or reserve allowed.

For example, the State of Oregon Special Revenue Funds (Governmental Funds), considered part of the budget, have fund balances of $769 million that probably will not be considered in the next year's budget. The total cash and investments, funds that were not used during the current year, was $812 million (surplus) and should be part of the next year's budget. So if next year there is a "budget deficit" ask about these funds not being considered or used.

4. Budgeted expenditures should be last year's expenditures (as shown in the CAFR) with an adjustment for increase in requirements (costed out) or reductions in requirements. In most cases the CAFR expenditures are not considered in the next year's budget because the CAFR in many cases is published after next year's budget is considered and sometimes approved.

Running Surpluses is Stealing

Although taxation is legitimate, running a government surplus isn't. It represents a taking by the state, because it exceeds the government's contract with the community. It is no different than if a federal agency were to take a person's land or possessions without just compensation (an activity barred by the Fifth Amendment). Excess taxation isn't what the people bargained for.

In presuming entitlement or authority not ceded by the community, the state abrogates its moral pact with those it governs. Its power is no longer derived from the people, whose rights to liberty and property it boldly denies.

The Governor and the Legislators

The Governor and the legislators should include in the next year's budget the previous years revenues not spent as indicated by the CAFR. These were once a revenue and should still be considered revenue for budgetary purposes.

Also, they should consider a zero-balance budget concept for all budget and non-budgetary items in the CAFR including the College and Universities and the Component Units.

Budgeted expenditures (for the budget) should be last year's expenditures (from the CAFR) adjusted for demonstrated requirement changes in project, program or services. An increase in requirements should include the costs of these additional requirements. Conversely, a decrease in requirements should result in a decrease in costs associated with the decreased requirements.

The Governor and legislators should take into consideration the entire financial condition/status of the State in the budgetary process by including all of the funds in the CAFR as being a part of the budget.

This system is covered in the CAFR Budget System. This system needs to be implemented in all governments.

If the State holds the excesses/surplus, it will earn 4% to 5% on that money. If the State returns the money to the people it will receive 20% in revenue because of the increased economic activity. This is elementary economics.

Laws need to be changed.

Every thing done by governments is by law. There are laws that state this or that regarding the use of some of the funds. Man made the laws, man can change the laws. How much effort would it be to include at the end of every law "...or if considered excess or not needed for the current operation that the funds will be refunded to the taxpayers?" See how easy it is.

At one time every law had its place, but things change. The laws need to be reviewed for change to meet the current needs of the government and the people to release these funds for use/refunded.

If this were accomplished, the State would have a huge surplus to refund (rebate or tax reductions) to the taxpayers. Such a refund would create considerable wealth and jobs, increase wages, increase State and local government revenues, dramatically increase the economy, and create the greatest economic expansion in the history of the State. Everyone wins.

If you want to know the financial condition of your government(s), do not look at the budget. Get the CAFR.

The Synergistic Magic of Economics.

What happens when the government holds the $10.91 billion.

(In Thousands add three zeros)Investment Income Per CapitaFamily of 4
The government holds and invests the surpluses at 4.5%.490,978140560

Here is what happens when the $10.91 billion is returned to the taxpayers (the private economy).

(In Thousands - add three zeros)Surplus
Per CapitaFamily of 4
The surplus is returned to the taxpayers.10,910,6143,11112,444
Wages are increased.5,455,3071,5566,222
State government revenues increase.2,182,1236222,489

Local government revenues increase.1,745,6984981,991
Federal government revenues increase.4,364,2461,2444,978
Total Benefits... 7,03128,124

In FY 2002 unemployment was 138,000. If the $10.91 billion were returned to the taxpayers, 218,212 jobs would be created. There would be a labor shortage in Oregon. This is why it is disastrous for governments to hold excesses/reserves of the taxpayers money.

Note: The economic impact analysis is further explained at Economic Impact Analysis.

The business community suffers the most.

Before the 9-11 tragedy, President Bush and Congress provided tax rebates which averaged $427 for every American. This was to create an additional $60 billion in consumer (economic) spending, turn the economy around and create jobs for the unemployed. However, 9-11 change that.

As the above economic impact chart shows, if the State returned the $10.91 billion in surpluses to the people the State economy would grow by $6,222 per capita. That is 15 times the amount the Federal government used to stimulate the U.S. economy. Businesses net incomes could double or triple. This is elementary economics.


The most important item is the SAIF Corporation (workers' compensation), a Component Unit and not part of the budget. The State is trying to run the operation like an insurance company. The State is not a private corporation. Holding reserves is OK for private organizations because if anything goes wrong, there is always the reserve to fall back on so it will not be bankrupt. But for governments it is different. Governments must be non-profit and use pay-as-you-go systems. This is because they have the power to tax, so reserves are not necessary.

The SAIF Corporation had net expenses of $59 million but it has a reserve (cash and investments) of $2.7 billion it is not using. That represents 46 years of reserves. The State created SAIF, the State can dissolve SAIF and institute a pay-as-you-go system. The amount of benefits paid will not change.

Unemployment Compensation, an Enterprise Fund and not part of the budget had net expenses of $220 million. It also had reserves of $1.4 billion. That represents 6 years of reserves.

Veterans' Loan, another Enterprise Fund and not part of the budget, had net expenses of $4 million. It also had reserves of $816 million. Let's see that represents about 207 years of reserves.

Housing and Community Services, another Enterprise Fund and not part of the budget, made a profit of $8.3 million and had cash/investment reserves of $806 million.

Environmental Management, a Governmental Fund and part of the budget, had net expenditures of $15 million and reserves of $277 million. That represents 19 years of reserves.

These only represent five of the 44 funds shown below that had cash and investment reserves not being used.

What to do?

Unless the budget flaws are corrected and the entire State finances are used in the budget process, the problems that created the surpluses will continue to exist. The budget deficits reported by the Governor and legislatures will be used year after year for the excuses for tax increases and/or to reduce needed services.

Just stopping a tax increase or a reduction in services will not solve the problems. The problems will come back the next year.

I have provided the details of the surpluses and explained the ways the surpluses are accumulated. The data is accurate because it comes directly from the government's own financial statement, the CAFR. You must provide the where-with-all to convince the Governor and legislatures that the surpluses exist and what should be done about it. I live in Arizona. It is not my money that is at stake.

Exhibit A

The 2005 - 2009 Oregon State CAFR is located at:

Items not Included

The following items are not included in the amount of surplus shown:

-Buildings, roads, bridges, land (not for sale), and equipment.

-Deferred compensation plans for employees. These are plans in which the employee contributes to his/her retirement over and above the normal employee retirement contribution.

-Any fund that is 100% supported by donations, bequests, gifts, endowments, etc. These are not taxpayers money.

-For Colleges and Universities. All endowment and similar-type funds should not be included as surpluses. Sometimes these funds are combined with other college/university funds. We are interested in surpluses, so in these cases the total amount should not be included.

-Funds in which the revenues/contributions are 100% held for other individuals, organizations or another government.

-Funds that are required by law in which a bank, financial institution, insurance companies, etc. are required to deposit with the government a certain amount for insurance against the entity going bankrupt. These are not taxpayers' money.

-Retirement/Pension Funds - only included are 1/2 of the actuarially determined excesses, the taxpayers portion. The other 1/2 is the government employees portion.

This report was prepared by:

Gerald R. Klatt (deceased - 07/11/04)
Lieutenant Colonel, USAF, Retired

This report can be copied, reprinted, and/or electronically transmitted to others and/or printed in the news media. This report should not be used for commercial purposes.