SCHOLARS FIND $21 TRILLION IN UNAUTHORIZED GOVERNMENT SPENDING; DEFENSE
DEPARTMENT TO CONDUCT FIRST-EVER AUDIT
this year, a Michigan State University economist, working with graduate
students and a former government official, found $21 trillion in
unauthorized spending in the departments of Defense and Housing and
Urban Development for the years 1998-2015.
The work of Mark Skidmore and his team, which included digging into
government websites and repeated queries to U.S. agencies that went
unanswered, coincided with the Office of Inspector General, at one
point, disabling the links to all key documents showing the unsupported
spending. (Luckily, the researchers downloaded and stored the
Now, the Department of Defense has announced it will conduct the first
department-wide, independent financial audit in its history (read the
Dec. 7 announcement here).
The Defense Department did not say specifically what led to the audit.
But the announcement came four days after Skidmore discussed
his team’s findings on USAWatchdog, a news outlet run by former
CNN and ABC News correspondent Greg Hunter.
“While we can’t know for sure what role our efforts to compile original
government documents and share them with the public has played, we
believe it may have made a difference,” said Skidmore, the Morris Chair
in State and Local Government Finance and Policy at MSU.
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 $122
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.
Skidmore thought Fitts had made a mistake. “Maybe she meant $6.5 billion
and not $6.5 trillion,” he said. “So I found the report myself and sure
enough it was $6.5 trillion.”
Skidmore and Fitts agreed to work together to investigate the issue
further. Over the summer, two MSU graduate students searched government
websites, especially the website of the Office of Inspector General,
looking for similar documents dating to 1998. They found documents
indicating a total $21 trillion in undocumented adjustments over the
1998-2015 period. (The original government documents and a report
describing the issue can be found here.)
In a Dec. 8 Forbes
column he co-authored with Laurence Kotlikoff,
Skidmore said the “gargantuan nature” of the undocumented federal
spending “should be a great concern to all taxpayers.”
“Taken together these reports point to a failure to comply with basic
constitutional and legislative requirements for spending and
disclosure,” the column concludes. “We urge the House and Senate Budget
Committee to initiate immediate investigations of unaccounted federal
expenditures as well as the source of their payment.”