by David Reavill
The American Financial System was the most reliable and carefully monitored in the World. Its cornerstone was absolute honesty; each dollar spent by a private company or public entity was accounted for. Those responsible for spending money, and those who recorded that spending, were often criminally liable that the amount paid and reported was 100% accurate.
Even Hollywood adhered to these high standards. Every Year at the Academy Awards, the votes are carefully tabulated by one of the Big Four Accounting Firms, thus assuring the audience that the results are honest and accurate.
From the State to FINRA to the Securities and Exchange Commission, the entire system was established to assure the public that our operation was entirely transparent and honest. And we took our responsibility very seriously. My background is as a Financial Principal for a couple of small brokerage firms. I faced criminal prosecution if I intentionally misled any auditors who came through our office each Year.
In a little over two years, we have seen all of that careful accounting demolished at the Federal Government level, and its consequences will be devastating.
President Biden and his Administration have created an open door for unscrupulous crooks to walk right in and plunder this country’s wealth and reserves.
Here are three examples of how a “free spending” President and his Administration have encouraged fraud.
The Covid-19 Stimulus Program began under President Donald Trump and was completed under President Joe Biden. The Program consisted of direct cash payments to individuals and specialized business loan programs. When all was said and done, the Stimulus distributed approximately $6 Trillion.
As you can imagine, the opportunity for fraud and other chicanery was rife with that amount of money involved. Some scams included: dead people receiving stimulus checks, companies without employees receiving stimulus loans, foreign students receiving money, etc.
Altogether it is estimated that $1.8 billion of the Stimulus paid may have been received through fraud. Attorney General Merrick Garland set up a special task force to pursue the criminals who defrauded the Government. Regrettably, that task force was shut down after just a year.
For the IRS, this entire affair had to be a nightmare. The IRS was the agency that was responsible for disbursing the stimulus funds. It is now apparent that the IRS did not have the time or workforce to set up proper controls and procedures to prevent this massive fraud. In their haste to send money to the “people,” Presidents Trump and Biden created a cottage industry of Stimulus Fraud. Something that likely could have been prevented with just a little more preparation.
While the troubles with the Stimulus Program might be chalked up to poor planning or a lack of resources (not enough staff), President Biden’s management of the Strategic Petroleum Reserve is simply reckless.
First, a little background, in 1973, the Yom Kippur War broke out between Isreal and its Arab neighbors. The United States supported Israel, and in retaliation, the Organization of Arab Petroleum Exporting Countries (OPEC) cut off supplies to the US.
America was caught flat-footed, without any backup supply. The price of imported oil and gas tripled. Then President Nixon recommended that the country begin rationing energy usage by raising thermostats and reducing driving. However, Congress was determined never to have this happen again, so they created the Strategic Petroleum Reserve (SPR) as a permanent backup.
Since its opening, Presidents have rarely tapped into the reserve for only minimal amounts. That is until President Biden came along. For the last year, Biden has continued to use the SPR as a way to manage the price of gasoline. In other words, he’s been “playing the market,” hoping to use a gas price reduction to lower inflation. The result has been that he has taken the SPR down to levels last seen in 1984. He is putting the nation at risk for oil supply shocks.
Did I mention that OPEC+ decided to reduce their production levels last week?, a move sure to raise the price of oil and gas here in America?
By now, we’ve all heard we’re spending $100 billion to aid Ukraine in its War with Russia. But is that really the amount? According to a recent article by Kirstin Garriss published in Yahoo News, the actual budget allocation is $113 Billion. And even that number may need to be higher.
Over the past few months, the Navy has been particularly vocal, declaring that they are running out of weapons and munitions. Adm. Daryl Caudle speaking before the Surface Navy Association’s annual meeting, bluntly stated that the Navy was low on supplies.
Speaking before this group of military supply companies, Caudle said they are not delivering the “ordnance we need.” “We all got tough jobs,” he said, “I need SM-6 (missiles) delivered on time. I need MK-48 torpedoes delivered on time,” and he’s not getting them.
This sentiment was echoed by Navy Secretary Carlos Del Torro, who indicated that this country must soon choose between continuing to supply Ukraine at present levels or supplying the US Navy. We can’t do both.
There is a soft method that politicians use to exceed their budgets. They move allocated supplies from one group, in this case, the Navy, to another, Ukraine. They are hoping to balance things out when the Fiscal Year ends. If successful, no one would be the wiser. But this time, that scheme isn’t working. The Navy needs more vital supplies. They are putting our Sea Based Defenses at risk.
When Congress prepared this Year’s Budget, which was signed into law by the President, the nation allocated nearly $600 billion for the Defense Budget. Aid to Ukraine was not part of the Defense allocation but was approved separately. Ukraine’s spending is almost 20% as large as our total Defense Budget. You can see how providing this kind of Ukraine largesse impacts all related department budgets, like Defense.
Today the President creates the illusion that the United States has unlimited resources and the ability to support the War in Ukraine indefinitely: “Whatever it takes, for as long as it takes.” It is a mantra that Biden repeats often. And it is simply not true.
As great a country as America is, there is a finite limit to what we can spend. The Budget you signed, Mr. President, is the guide that determines how to allocate those resources.