There is a problem with government accounting that drives me around the bend, but that I rarely see noted elsewhere. When corporations build a factory, it is considered a positive, the creation of a capital asset. But when government builds a road or a school, it’s an expense. It’s simply spending money, treated the same as the most frivolous waste. Why can’t we have a system of accounting that gives government credit for the creation of genuine assets like bridges and schools?Indeed. The Motley Fool issued a balance sheet that looks skimpy. A Census report, current to 1999, is not much better. Is it really the case that nobody has ever written down the acquisition prices of the Capitol and Yellowstone Park and the Kennedy Space Center and the aircraft carriers and the 492 Amfleet cars and all the little white postal trucks and the secret computer at White Sulphur Springs and calculated the allowances for depreciation of these assets? The National Income and Product Accounts suggest nobody has done that work.
If you're going to do cost-benefit analysis to support a capital grant, the reality of the resulting asset being capable of generating a potentially taxable stream of gains from trade ought to be treated differently from the purchase of paper clips for the latest reports that will be submitted then archived or shredded.
No comments:
Post a Comment