Joe Carvin is the founder of One World. His time spent as Town Supervisor for the Town of Rye and three-decade long career in emerging market finance, his ability to speak 5 languages fluently, and being a father have influenced his passion for global citizenship education. Joe also holds graduate degrees from the Harvard Kennedy School of Government (MPA) and New York University (MBA).
It would not be hard to argue that the U.S. federal government is the worst-run government in our nation and perhaps one of the worst-run governments in the world.
When I ran for Town Supervisor in Rye, NY., I campaigned on the fact that the town had overspent its budget eight years in a row and had not published timely financial statements.
I was pleased that after taking control of this miniature-sized government, we could apply simple essential good government best practices that enabled us to reduce expenditures by 25% on a sustainable basis over the 8 years we operated the town government and publish audited financial statements on time.
Imagine my surprise when I ran for Congress in 2012 only to find out that since 1950, the U.S. federal government has overspent its budget 71 of the last 75 years, bringing debt from $257 billion in 1950 ($3.3 trillion adjusted for inflation) to an unsustainable $36.2 trillion today thereby increasing our debt load ten-fold since 1950.
Congress has overspent its budget in 71 out of 75 years and has not passed an on-time budget since 1997. That is, since 1997, we have effectively had one Continuing Resolution after another as Congress continues to make promises it cannot keep.
Worse, the result of that negligence now has us spending more on interest expense than on defense, thereby violating the threshold that historian Nial Ferguson explains has brought down empire after empire: Debt Has Always Been the Ruin of Great Powers. Is the U.S. Next?
Unfortunately, for Americans, 36.2 trillion dollars does not reflect the actual financial obligations undertaken by the U.S. Federal government. The actual level of U.S. Federal government financial obligations ranges from $120 trillion to $200 trillion.
Most Americans do not know the real level of federal obligations because, unlike the Town of Rye, the U.S. Federal government makes no effort to hire an external auditor to review and opine on the financial health of our nation. Our national government has handed that responsibility over to the Government Accounting Office or the GAO.
However, the GAO has never been able to issue a clean opinion on the full operations of the U.S. federal government. That means our internal auditors have no idea how much our federal government is spending. No business could operate without a clean opinion from an internal or external auditor, nor could it be listed on any stock exchange.
Perhaps most disappointing of all is that the GAO has conspired with the OMB and the Treasury to subvert the intent of both Public Law 84-863 of 1956 and the CFO Act of 1990 by refusing to apply generally accepted accrual accounting methodology to the promises made by our government for Social Security and Medicare. That means that, depending on the accrual methodology used, our federal government is hiding another $80 trillion to $170 trillion in fiscal obligations on top of the $36.2 trillion generally reported.
Public Law 84-863 of 1956 explicitly called for the application of accrual accounting.
"(c) As soon as practicable after the date of enactment of this subsection, the head of each executive agency shall, in accordance with principl es and standards prescribed by the Comptroller General, cause the accounts of such agency to be maintained on an accrual basis…”
The CFO Act was initially introduced to Congress by Congressman Joe Dioguardi, one of the few CPAs ever to be elected to Congress. Dioguardi developed his bill in large part to ensure the application of best practice accrual accounting standards consistent with Public Law 84-863. Unfortunately, the Treasury, OMB, and GAO stepped in to create the Federal Accounting Standards Advisory Board (FASAB), an entity that has steadfastly refused to apply accrual accounting to Social Security and Medicare.
Creation of FASAB
When Shelia Weinberg, founder of Truth in Accounting, testified before FASAB, she was told that FASAB does not account for unfunded social insurance obligations as liabilities because the U.S. federal government has no obligation to pay for Medicare or Social Security beyond the checks that have been written this month!
FASAB effectively tells the American people that while the U.S. federal government collects 15.3% in payroll taxes from U.S. employers and employees every year, the U.S. federal government is not obligated to make good on their promises beyond this month's end. This does not pass a “straight face” test.
In his book, The Fight of a Lifetime: Telling It Like It Is on our National Debt, Congressman Dioguardi explained, “I still believe, as I testified on February 25, 2009, that the FASAB was formed by the Treasury Department to effectively block the use of full liability accrual accounting in the annual financial statements of the federal government with voting seats on FASAB.”
He reiterated his concerns in a lengthy article published in the December 2015 edition of the CPA Journal on the 25th anniversary of the CFO Act: Joe Dioguardi - The CFO Act 25 Years Later
It is hard for me to understand the wanton behavior on the part of FASAB. It is like a weatherman knowing a tornado is about to hit, and rather than warn the public so they can prepare and take action, they hide the facts, leaving behind a path of destruction that could have been prevented.
The American public needs to urgently understand that the U.S. federal government is insolvent, with fiscal obligations between $120 trillion and $200 trillion. Worse, the bureaucracies running our government are morally bankrupt.
In closing, I am now a village trustee. A village manager manages our small village because it is too complex for elected officials to manage without professional support and guidance.
For some reason, Congress is content to run the most significant operating entity in the world with no single individual in charge of the 3 million employees and 5 million contractors operating from a $7 trillion budget. One might ask, who is in charge? The obvious answer is no one.
We are on the precipice of a financial crisis. We need to act with urgency and focus to restructure the U.S. Federal government fundamentally.
DOGE should not be an afterthought, nor should it sunset in July 2026. It needs to be central to the process of taking a serious-minded approach to fundamentally restructuring the U.S. Federal government.
It is time for the US federal government to reenact the CFO Act of 1990, connecting it with its true purpose - bona fide accrual accounting - and add a Chief Operating Officer to sit alongside the CFO proposed by the act. DOGE should insist on absolute transparency with either a radical restructuring of FASAB or its outright elimination and finally comply with Public Law 84-863.
DOGE should look beyond its efforts to eliminate waste and fraud, and it should be tasked with putting in place an operating team responsible for running the U.S. Federal government.
Does anyone for a second believe that any of our top corporations could be run by 435 politicians who have not passed an on-time budget since 1997, who have overspent the budgets they do produce 71 out of 75 years, increasing debt ten-fold, who add insult to injury by hiding $80 trillion in debt from public view?
Our country has a plethora of talented turnaround specialists who could and should come into the U.S. Federal government and run it efficiently, ensuring that stated goals are necessary and realized.
DOGE and the Trump Administration should look to build on the work being done by DOGE today and hire a team of permanent professionals - starting with a COO and CFO - both responsible and visible to the general public for telling us the truth about our financial obligations and for efficiently running the sprawling behemoth that the U.S. Federal government has become, making it efficient because every dollar wasted is a dollar that could have gone to someone in need.
We have the people who can do this. The real question is, do we have the willpower, or will we simply fall into bankruptcy, stealing our children’s future? The choice is now or never.