He is the founder of Truth in Government—a non-profit organization dedicated to fiscal responsibility and to improving weak federal accounting and financial management practices. He is also the author of “Unaccountable Congress: It Doesn’t Add Up,” from which we excerpt a statement of his credo, as we will do in upcoming issues with the incumbent and other candidates, in their own words.

Mr. DioGuardi and his wife Shirley live in Ossining, N.Y. Son John is a senior counselor at the Phoenix House in Yorktown, and daughter Kara is a prominent songwriter, music producer, and a judge on “American Idol.”

Unaccountable Congress

When Unaccountable Congress: It Doesn’t Add Up was first published in 1992, the Chief Financial Officers Act that I authored as a New York Congressman had been signed by President George H.W. Bush just two years earlier. It seemed like the government’s standards for financial reporting might be improving, and that we were headed for real reform. The bill had been watered down some, but it still created a chief financial officer for each of the federal departments and agencies, and gave the Office of Management and Budget more control. The future had the potential to be brighter and the taxpayers more informed about where our money was going. Now, nearly 20 years later, our government continues to operate behind closed doors regarding its budgeting process, the national debt is skyrocketing out of control into the trillions, and we recently witnessed a near collapse of the entire U.S. economy—thanks to the same old shell games in Congress. We still haven’t learned the lessons of the past regarding accountability in federal budgeting, and as a result we continue to stare into the heart of a “gathering storm” (to use the prophetic words of Winston Churchill). But most important, we aren’t addressing the root cause of our massive debt: bloated government, which, if the current Congress has its way, will only expand more. In the absence of sound accounting and sound budgeting, we lack information for decision-making and invite gimmickry and half-measures, rather than leadership.

We must act now to keep our country solvent. The situation is urgent. The President, his cabinet, the members of the House and Senate can pretend in front of TV cameras that we have the luxury of time and that we need only increase our debt ceiling by another trillion or two, and the country will be fine—but they know that our economy is literally living on borrowed time and borrowed money. The big spenders in Congress believe that bigger government is the answer, and they keep pushing up the ceiling on the national debt. Now the good news: the American people are smart. They know that smaller government is the answer, and they are willing to get off the couch and get involved to create the government they want.

The Scott Heard ‘Round the World

As of this writing, the biggest surprise in the Obama-era political arena has been the January 2010 election of Scott Brown to the Massachusetts Senate seat, a position previously occupied by Democrat Edward Kennedy for more than 45 years. The moderate Republican ran a positive campaign based not only on defeating the healthcare bill, but also on accountability and reform. The voters of Massachusetts who sent Brown to the Senate signaled the seismic shift in the U.S. political atmosphere at the moment; more citizens, particularly independent-minded people in all political parties, are finding constructive ways to express their anger at the unaccountable Congress and the Obama administration’s agenda of more intrusive government. The surge in citizen activism is personified by the Tea Party movement, which started primarily as a reaction to healthcare reform legislation. When the Obama administration and Congressional representatives dismissed the first Tea Party march in April 2009, the activists’ resolve only strengthened and their numbers grew. The mission expanded from exercising First Amendment rights to making Congress more responsive to their electorate. The Tea Party movement attracted and energized the fiscal conservatives in Massachusetts to secure a shock victory for Brown in the U.S. Senate race. While Brown’s victory is certainly a significant example of the kind of grassroots activism needed to push the government to act in the nation’s best interests, many of these citizen activists may not be completely informed as to why the national debt is ballooning out of control, or the specific actions that need to be taken to ensure government accountability with their tax dollars.

The best way to understand how our national debt affects you as a taxpayer is to think about it in simple terms. If you or your family need to spend more in a month than your actual income, you might borrow money that you will have to repay at a certain interest rate. If you keep doing this, or do not make full and timely payments, your interest costs will rise and eventually exceed anything else in your budget. This is what is happening to the United States; President Obama admitted as much to Steve Scully on C-SPAN in May 2009 when he said, “We are out of money now.”

In Washington Nothing is Certain but Debt & Taxes Our reported national de bt has grown from around $800 billion in 1980—which took two centuries to accumulate—to just over $12 trillion as of September 30, 2009, less than 30 years later. The Obama administration freely admits that it will rise to $20 trillion by 2020—unless we act now. It’s been a mind-boggling increase, fueled by the ever-burgeoning size of the U.S. government. (Do we really need 16 intelligence agencies, especially when their combined efforts couldn’t keep the Christmas Day terrorist off the plane to Detroit?) To repeat what I said originally in Chapter 4 of this book, the spiraling deficit will render the United States economy unsustainable and in need of a bailout itself.

Why? Because the interest alone on a $20 trillion debt will be more than $1 trillion per year at current rates, and these rates will almost certainly rise. Then we’ll have the problem of unrecorded and unfunded liabilities such as Social Security and Medicare, currently estimated at $45 trillion. These programs tend to disappear from the discussion because they are effectively kept off the government’s books and annual financial reports. Worse yet, “baby boomers” now in the process of retiring will expect their benefits soon. And since we still don’t have outside auditors coming in to oversee government budgeting, spending, and reporting, it’s hard to tell whether future retirees will receive all of the money promised them. Every year since 1969, Congress has spent more than the revenue it has brought in and the number of government agencies and programs has expanded, creating a mountain of debt on which the Treasury Department must pay interest. The budget “surpluses” claimed by the Clinton administration weren’t surpluses at all—Clinton used the “unified budget approach” started originally by President Lyndon Johnson for the purpose of concealing the real cost of the Viet Nam War. Johnson offset the surpluses in the Social Security Trust Fund against the deficit from U.S. government operations in order to show a better result. (The same shell game is at work today, but now the Medicare Trust Fund surpluses are also being used to reduce the size of the budget deficit.)

In the fiscal year of 2009, the Treasury spent $383 billion of your tax dollars on interest to holders such as China and Japan. And you wonder why social services or crucial infrastructures such as our roads are in dire need of help? Compare that $383 billion in interest to the paltry $73 billion for the entire Department of Transportation last year; we’re already paying a disproportionate amount for interest and receive no service for the expense. In order for businesses to hire new workers, they need tax breaks and consumer spending—not more tax increases, which are inevitable as interest on the debt grows to become the biggest item in the federal budget. These tax increases will also cause the inflation of consumer goods as corporations pass cost increases on to the consumer. This is the last thing a country struggling with high unemployment needs. To sum things up, the size of the national debt affects the interest rates for borrowing and investing, the federal income tax paid, the price each of us pays for groceries and other goods, as well as the unemployment rate. For all intents and purposes, the national debt is the 800- pound gorilla in the room.

U.S. Senator Sam Brownback from Kansas recently pointed out an important new study presented at the American Economic Association (“Growth in a Time of Debt”) that shows how high national debt bodes poorly for any country’s economic growth. He concluded that annual growth in U.S. gross domestic product (GDP) has averaged considerably less than 4% over the past 10 years, and that “carrying a high national debt could mean the difference between a growing economy and a contracting economy.” Our national debt is expected to exceed 90 percent of GDP this year, and 100 percent within the next decade—that’s not even considering the huge liabilities for Social Security and Medicare.

Ask an Accountant

As the first practicing Certified Public Accountant (CPA) elected to Congress, I have long tried to call attention to our inadequate federal budget, accounting, and reporting practices. While in Congress during the late ‘80s, I served on both the House Government Operations and Banking Committees, where I learned firsthand that government entities use gimmicky shell games similar to those special purpose entities employed by Enron— a disgraced company that used blatant subterfuges to hide its growing losses and debt. In Washington, these special purpose entities are called Government Sponsored Enterprises (GSEs), and include companies such as the Resolution Trust Corporation, which was used to implement the massive off-budget bailout during the Savings and Loan scandal of the late 1980s. More recently, two other GSEs—Fannie Mae and Freddie Mac— were used to fuel the subprime mortgage and toxic securities scandals, leading to massive amounts of government bailout money in the form of federal guarantees of their bonds.

In a Washington Times op-ed piece published on August 24, 2009, I wrote that “the financial management failures of U.S. corporations cannot come close to rivaling the budget and bookkeeping shambles of the U.S. government.” I went on to explain that the hole in our nation’s finances is really $56 trillion once the unrecorded liabilities of about $45 trillion from Medicare and Social Security are factored into the equation. This number is a far cry from the $12 trillion national debt publicized by the government’s balance sheets, which leave off financial manipulations on a scale that dwarfs those of the Enron scandal. America has a national debt of gargantuan proportions because of the unaccount-ability of Congress, unbridled deregulation during the Bush-Cheney administration, and accelerated spending of both political parties. The debt situation is even worse when you consider the operating deficits of GSEs that are funded by U.S. Treasury bills and other government-backed debt outside the budget process!

It’s Deregulation time, Who’s Minding the Store?

Just what has happened in the fiscal realm since I left Congress in 1989? A chronology of important events following this foreword illustrates my point: Congress has continued to spend as if there is no tomorrow, and our Congressional representatives use their plastic voting cards as a collective “credit card” to provide the juice—like illegal steroid use in professional sports—that keeps their jobs in Washington, while taxpayers remain in the dark about what is really going on. In 1999, we saw the repeal of the Glass- Steagall Act, created in the wake of the Great Depression to separate investment and commercial banks. Once repealed, there was effective deregulation of the banking, insurance, and securities industries, which allowed financial institutions to become “too big to fail.”

Writers and opinion-makers have said that the highest impact financial event during the crisis of the past few years was the subprime mortgage crisis, which began in 2007. Stock markets plunged and credit froze in September 2008. As a remedy, U.S. Treasury Secretary Henry Paulson proposed a sweeping $700 billion dollar bailout of our financial institutions: The Troubled Asset Relief Program (TARP). Struggling Americans who had to give up their homes didn’t enjoy learning that huge banks were being bailed out, but Federal Reserve Chairman Ben Bernanke claimed at the time that we might have been only three days away from our entire economy collapsing. Of course, this would have had disastrous ripple effects around the world. Something had to be done, and so Congress, along with the American people, held its collective nose and approved the massive bailouts without any due diligence. There’s a common thread here that I began to unwind in the original printing of this book and it’s still unraveling today. Former government interventions (the S&L bailout of 1987, the Farm Aid crises in the early ‘80s, and the New York City bailout in 1975) used the “full faith and credit” of the federal government to float bonds backed by the U.S Treasury. Now, we have continued this tradition by bailing out “too big to fail” companies without passing legislation to prevent similar catastrophes in the future. Worse still, we have not properly accounted for the cost of these bailouts, leaving the next generation to figure out how to pay for our profligacy.

How Much Are Bailouts Really Costing Us?

Regarding the subprime mess, the Federal Reserve failed to use its supervisory and regulatory authority over banks, mortgage underwriters, and other lenders. Fannie Mae and Freddie Mac, the nation’s two largest mortgage finance lenders, had to be essentially nationalized—placed under the conservatorship of the Federal Housing Finance Agency with money authorized by the Housing and Economic Recovery Act of 2008. Accountants and Congressional oversight forces were not doing their jobs. They allowed huge loans to be written without the proper reserves and adequate accounting, which led to the biggest banking crisis debacle since the Great Depression.

The price tag for the widespread bailouts has been an ongoing source of consternation, if not real outrage, from the public. One problem seldom discussed in the press is that no one knows the real size of the bailout. Estimates vary depending on who is reporting (The New York Times reportedin September 2009 that the government has “rolled out more than a dozen programs and made commitments of about $12.5 trillion to protect the economy from crisis”).

Economist and journalist Nomi Prins found that, after crunching the hidden numbers, the size of the bailout was $14.4 trillion and counting. In her most recent book, It Takes a Pillage: Behind the Bailouts, Bonuses, and Backroom Deals from Washington to Wall Street, Prins constructs charts that show $7.2 trillion flowing through the Treasury Department (mostly to Money Market Mutual and Public-Private Investment Funds) and $7.2 trillion through the Federal Reserve (mostly for Commercial Paper Funding Facility, Mortgage-backed securities purchase, and Term Asset-Backed Securities Loan Facility).

What’s a few trillion here or there? Well, it’s a lot for the taxpayer, and it’s something that shouldn’t be difficult for citizens to trace and account for. As columnist George Will said, “The essence of this crisis is lack of knowledge, including the inability to know who owes what to whom, and where risk resides.” Americans demand the most from their favorite contestants on hit shows like American Idol; shouldn’t we demand the most from politicians saddling our children’s future with enormous debt?

Let’s take a look at what Congress and the Obama Administration are doing to respond to public anger and concern. Congress established a Financial Crisis Inquiry Commission chaired by Phil Angelides, a former state treasurer of California, where unemployment and foreclosure rates are among the highest in the nation. The commission has been grilling the heads of the financial companies who benefited from the bailouts, even though many have repaid (with interest) the funds they received. President Obama appears to be catering to public anger by conjuring up a “revenge tax” on banks. Neither one of these approaches will yield a constructive solution to our current situation. The President has also proposed establishing a new agency to protect consumers—spending even more taxpayer money and creating more debt.

We have built an economic “house of cards” on negative personal savings rates, excessive consumption, spending beyond our means—both individually and as a nation—and now that house is falling in every direction. It’s going to require a lot of work to clean up the mess, but if we start now, we can succeed.

Congress: Breeding Ground of the Double Standard

Are you surprised that Congress won’t live by the same budgeting, accounting, and reporting standards that it requires of everyone else? I discovered this during my years in Congress and wrote about it in the original book.As far back as 1956, the second Hoover Commission foresaw the problem, and actually did something about it that could have worked. It pushed Congress to amend the 1950 Budget and Accounting Procedures Act to require all government agencies to maintain their accounts on the accrual basis to record commitments to spend in the future, as well as current spending. The Securities and Exchange Commission imposes this method, known as GAAP, on publicly traded companies. Congress never implemented this important amendment, and as a result we have had a double standard between private sector and government budgeting, accounting, and reporting for more than 50 years.

The accounting system we have failed to rectify has, in effect, created what I call a “subprime national debt,” and a good deal of the money you pay in taxes goes toward paying interest on that debt. When Republicans took over the House of Representatives in 1994, they voted on the first day to have Price Waterhouse conduct an audit. In its first audit report, Price Waterhouse found that the House “lacks the organization and structure to periodically prepare financial statements that… are accurate and reliable” and that financial management information was “simplistic and ill-suited” for an organization with a billion dollar budget, and that it could not be audited.

I called it a “smoking gun” when the late Robert Novak interviewed me for his 1995 documentary film, America, the Bankrupt. Nothing has changed since then. This double standard and the problems it creates for the American people were so disturbing that I founded Truth In Government, a non-profit organization dedicated to bringing appropriate accounting standards in Congress. Over the past two decades I have traveled the country, revealing what Congress really does and really spends, and demanding that business and civic groups pay attention to the need for change.

My message has not changed: It is crucial for us to restore integrity to the budget process and provide financial accountability to the taxpayers. The challenges that we face are so great, that only a shared commitment will make it happen. These are perilous times that will require unified effort and leadership, but the politicians cannot muster the political will to confront the nation’s financial problems. Send Congress To Accounting Reform School Congressional budgeting, accounting, and reporting practices must be changed. I’ve been saying this since I learned what Congress was actually doing when I served there. In 1993 I chaired a Task Force on Emerging Issues, sponsored by the Association of Government Accountants. Here’s my statement in the report: At a time when Congress must make important decisions on future budget priorities and commitments, the information necessary to make those decisions is woefully defective. Weak government-wide budgeting and accounting systems produce insufficient reliable information about how the government spends its funds and how decisions made today will affect tomorrow’s taxpayers. Further, the Congressional budgeting process commonly relies upon imaginary revenues, ignores unfunded obligations, and makes use of numerous other practices lacking economic and accounting reality. The Federal government badly needs major budgeting reforms.

The task force recommended the six reforms listed below, none of which have been adopted more than 17 years later. If we had adopted even some of these reforms, we could have prevented the mess in which we find ourselves today:

• Employ generally accepted accounting principles (GAAP), beginning with the budget process, before money is committed or spent.
• Adopt separate budgets for general funds, trust funds, and GSEs (Overall, such tripartite reporting would give Congress and the public a far more accurate picture of the federal government’s spending activities).
• Adopt effective capital budgeting, which is a financial process used to plan, control, record, and report long-term capital expenditures.
• Adopt biennial budget cycles corresponding to a Congressional term of office (This would require Congress to authorize spending only once in two years and allow more time for needed oversight).
• Maintain the Budget Enforcement Act of 1990 (If discretionary spending in any of three categories— defense, international, domestic— exceeds the Act’s target as of the beginning of a fiscal year, an automatic sequester is applied to that category to stop spending from other federal sources to cover it).
• Publicize the true financial condition of the federal government and an accurate report of the results of all the operations of the federal government each year. We absolutely need a concise, independently-audited GAAP-consistent report on the operation and financial condition of the U.S. government, including all its revenues, expenditures, assets, and liabilities, that would be made readily available to the public and news media shortly after each September 30, the end of the federal government’s fiscal year.

Wisdom of the Founders: Limit Government During the first term of the Obama Administration, we have watched a messy political drama unfold over healthcare reform. Congressional representatives aren’t listening to their constituents who want smaller government and less intrusion. They argue about how to fund this largely unpopular initiative more than whether we could or should pay for it. The members of Congress who are pushing their respective House or Senate healthcare bill know that the purported savings from the bills won’t be realized until later, if at all. Yet they raise taxes now and continue to pretend otherwise, misleading the American people they are supposed to represent.

In 2010, many Americans are hurting— especially the middle class and the poor. Housing has not fully recovered, our commercial real estate market is starting to feel the pain in big cities, and we have an unemployment level at 10 percent and growing—the highest since 1982, according to recent Bureau of Labor statistics (The unemployment number is actually higher, considering how many people are now working part-time or have stopped searching out of frustration or hopelessness). Ironically, we still haven’t seen fit to look at our financial problems with transparency and accountability, utilizing the finest financial management practices and principles of accounting. We have not addressed redundancies in government programs—one of the first strategies businesses use when they reduce costs.

One of the greatest lessons I learned while in Congress was that our founding fathers, the framers of the U.S. Constitution, got it right. They deliberately limited the power of the federal government in order to preserve freedom and limit the burden of paying taxes, which had been a major source of discontent before the Revolution. Limiting federal government power means limiting its size—an idea that has been forgotten or systematically rejected in the past 100 years. The healthcare reform issue jolted many Americans out of the big government mindset, and now we need to chart a new course for prosperity.

The elections of fiscal conservatives in 2009 New Jersey and Virginia gubernatorial races and in the 2010 Senate race in Massachusetts serve as a bellwether for our future. Other positive signs indicate that we are beginning to reject huge deficit spending and limit the size of government. Emerging leaders such as Rep. Paul Ryan of Wisconsin have proposed solutions for balancing the budget and reducing Medicare costs. Rep. Frank Wolf and Rep. Jim Cooper have jointly proposed forming a bipartisan panel to address the budget crisis and “put all options on the table.” Truth In Government will contribute to this new, positive direction by creating a plan for job growth and fiscal sustainability.

For the past 20 years, I’ve been beating the drum for greatly needed reform, and now America is waking up. We the people can be a force for America’s sustainable future, if we demand that Congress make the changes Truth In Government has identified, balance the budget, and generate real jobs.

Joe DioGuardi
Ossining, New York
January 2010

 Truth in Government’s 5-Point Plan

(Taken from www.TruthInGovernment.org)

1. Develop a fair and accurate budgeting, accounting, and reporting process based on accrual accounting. Convert the current cash basis accounting system used in the annual Congressional budgeting process to the system of “Generally Accepted Accounting Principles” (GAAP) required of publicly traded corporations by the Securities and Exchange Commission.

2. Publish clear and accurate information on the finances of the federal government annually. Use GAAP to disclose all spending and commitments to spend, ensuring that our national debt to foreign sources is clearly delineated. 3. Make the Chief Financial Officer (CFO) function a Cabinet-level position and remove financial management and reporting functions from the Treasury Department, transferring them to the nation’s CFO, who should immediately engage independent auditors.

4. Create a new independent body like the Federal Reserve Systemto promulgate sound budgeting and accounting that will prevent political manipulation and conflicts of interest, removing once and for all the perennial confusion about the real size of our annual budget deficits and our national debt.

5. Urge Congress to implement meaningful budgeting, accounting, reporting, and auditing reforms now.

Selected Chronology of Events Since 1992: The “Gathering Storm” of the U.S. Financial Crisis

1992: Federal Housing Enterprises Financial Safety and Soundness Act creates Office of Federal Housing Enterprise Oversight within the U.S. Dept. of Housing and Urban Development (HUD). Mandates that HUD set goals for Fannie Mae and Freddie Mac regarding low-income housing.

1994: Riegle-Neal Interstate Banking and Branching Efficiency Act repeals the Bank Holding Company Act of 1956 that regulated bank holding companies; allows interstate mergers between “adequately capitalized and managed banks, subject to concentration limits, state laws and Community Reinvestment Act (CRA) evaluations.”

1995: CRA allows mortgage lenders to get credit toward affordable- housing lending obligations for buying subprime securities. This leads to banks lending to higher risk people with bad credit, causing the subprime market to grow.

1997: Freddie Mac helps First Union Capital Markets and Bear Stearns & Co. launch the first publicly available securitization of CRA loans.

1998: U.S. hedge fund Long-Term Capital Management experiences massive losses due to bond defaults by the Russian government— causing U.S. Treasury Secretary Robert Rubin and the Fed to organize $3.6 billion in bailouts due to the panicked world economy.

1999: Gramm-Leach-Bliley Act: “Financial Services Modernization Act” repeals the Glass-Steagall Act and deregulates the banking, insurance, and securities industries. Financial institutions continue to grow even larger.

2000: Commodity Futures Modernization Act of 2000 allows trading of credit default swaps with little or no oversight. This is where the buyer in a credit derivative contract gets paid when the underlying investment defaults.

2000-2001: Corporate scandals of Enron, WorldCom, Adelphi and Tyco garner widespread media attention and public vilification. Many employees lose their jobs and retirement savings.

2000-2001: “Dot com” bubble bursts. The Federal Reserve lowers federal interest rates 11 times, from 6.5 percent to 1.75 percent, creating an easy credit environment fueled by subprime mortgages.

2001: September 11—The U.S. is attacked by al-Qaeda; more than 3,000 innocent people are killed. The World Trade Center buildings are reduced to rubble.

2002: Fannie Mae and Freddie Mac start buying up subprime mortgages.

2002: Investors begin buying more houses, inflating the value of the housing market as demand surges.

2003: Bush administration recommends moving government supervision of Fannie Mae and Freddie Mac from Congress to a new agency with Treasury; changes are blocked by Congress.

2004: Mortgage-backed securities start being issued more frequently after the SEC lifts leveraging restrictions. Securities, which can now be priced much higher than actual value, push investors to wrongly assume home prices will keep rising for the foreseeable future.

2006: Interest rates rise and mortgage loan terms change, triggering the beginning of the widespread foreclosures from homeowners who can no longer afford their mortgages. Most subprime loans increase their interest rates after a few years. The blame game begins.

2007: Subprime mortgage fiasco reaches crisis level with 25 mortgage firms declaring bankruptcy. We learn that many banks and global hedge funds were exposed to these assetbacked securities that lacked economic reality and as a result had gone and continue to go bad.

2008: January—Global stock markets suffer their biggest drop since September 11 and the U.S. sees the largest drop in home sales in more than two decades. People in hard-hit cities like Stockton, CA, simply begin leaving their homes; more and more homes go on the market and newer built homes that sit unoccupied are looted, adversely affecting neighborhoods and prices.

2008: March 16—The Federal Reserve and Treasury broker a deal for JP-Morgan Chase & Co. to buy Bear Stearns, which was close to collapse—the first brokerage rescue since the Great Depression.

2008: July 11—California-based IndyMac Bank, the ninth largest mortgage lender, fails due to loan defaults and a run on deposits.

2008: September 7—The nation’s financial system begins free fall. Fannie Mae and Freddie Mac are essentially nationalized: placed under the conservatorship of the Federal Housing Finance Agency, the money having been authorized by the Housing and Economic Recovery Act of 2008.

2008: September 15—Lehman Brothers files for bankruptcy.

2008: September 16—U.S. government bails out AIG.

2008: September 19—Treasury Secretary Henry Paulson proposes the Troubled Assets Relief Program (TARP) to buy troubled assets at discounts from financial institutions that are then made whole.

2008: October 3—Congress passes the Emergency Economic Stabilization Act, which authorizes the Treasury Department to spend $700 billion to combat the financial crisis. It be Barack Obama signs $787 billion stimulus package into law.

2009: June 1—American iconic car company GM declares bankruptcy, requiring a high “investment” (bailout) from the federal government.

2009: June 17—The Treasury Department releases its proposal for reforming financial regulatory system and receives heavy criticism for not doing enough.

2010: January—The Treasury Department has given out $247 billion to over 700 banks. Of that amount, only $162 billion has been repaid.

2010: January—The Financial Crisis Inquiry Commission convenes to “examine the causes, domestic and global, of the current financial and economic crisis in the United States” and learns little, if anything, from top financial industry executives.

2010: January—President Obama calls for a windfall tax that would force banks to pay back bailout funds after seething public resentment at ongoing executive bonuses and record profits.

2010: January 19—Continuing a political tsunami that removed the Democratic governors of Virginia and New Jersey from office in the November 2009 elections, the Massachusetts Senate seat that Ted Kennedy held for 46 years is lost to the Republican Party, threatening the Obama administration’s healthcare agenda and its profligate deficit spending.

2010: January 27—A Congressional Committee questioned Treasury Secretary Tim Geithner about why AIG needed to be bailed out with payments of 100% on its now worthless assets, instead of allowed to go bankrupt. Meanwhile, the Federal Reserve refuses to release documents such as emails that would reveal to U.S. taxpayers about the rationale of the AIG bailout.

2010: January 27—President Obama delivers his State of the Union address. The President has now squandered an entire year, and explained the effectiveness of his stimulus bill as “it could have been worse.” The unemployment rate went up despite the largest spending increase in U.S. history, and now Congress wants an increase in the debt ceiling substantially more than the entire deficit of $1.4 trillion in the most recent fiscal year (2009).

2010: November elections—A new beginning for America fueled by an energized electorate OR the beginning of the end for the America our founding fathers envisioned?

2010: November 16—Twentieth anniversary of the Chief Financial Officer and Federal Financial Reform Act (“the CFO Act”), authored and introduced by Joe DioGuardi.