FORENSIC ECONOMIC ANALYSIS:
Thinking about 2008
2008 will be a year for the record books, and I don’t mean this in any positive way.
I’ve been thinking about 2008. Actually I’ve been thinking about forensics, the 2008 elections, the debt/deficits, dollar prices, energy, food, and “common” sense. 2008 will be a year for the record books, and I don’t mean this in any positive way. We are in one big mess on so many fronts. There are so many glitches in the systems set up to contain the problems that negatively impact our way of life. The patches/fixes, both in place and proposed, have NOT become solutions—they enhance our problems.
You see in 2008 the word “forensics” will become the buzzword of ultimate importance. It will be used in ever increasing contexts – or at least it should. Forensic investigations will prove central to forensic medicine, forensic accountancy, forensic journalism, and forensic economics. True solutions/ fixes only can come from a real understanding of the facts and the truth. Varnishing or sweeping our problems under the rug via spin, hype, and propagandized distractions have never solved anything.
“Forensic” comes from the Latin forensic meaning forum, or rather “putting before the forum.” Any rational decision, or solution, requires an honest presentation of the facts (and the evidence) behind what has transpired. Forensics involves chronicling and preserving evidence, analyzing that evidence, and presenting the finding to (the court of) public opinion. Spinning, hyping, and out-and-out lying have only made our problems/ dilemmas worse. Errors have been made. Yes... even crimes were committed. The only hope of turning things around will involve owning up to our mistakes, prosecuting the criminal acts, and proactively making the hard decisions to return to those paths which made this country strong.
All elections are important, but the 2008 elections are a make-or-break for this nation.All elections are important, but the 2008 elections are a make-or-break for this nation. The 2008 elections will dominate the news and the media coverage. It seems like they have already gone on for an eternity. But thus far... just what have the lions’ share of the campaigns revealed to “We the people...” regarding the issues/problems facing US/us as a nation? What do we know about the candidates and their stands on those true issues? What are their platforms/plans to facilitate a turn around? How is their agenda any different than the same-old, same old that got us to where we now find ourselves? A forensic analysis of the Democans and the Republicrats show them as Siamese twins joined at the “and spend!”
As 2007 wound to a close, our national debt stood at $9.125 TRILLION. Over $4 TRILLION of which were surpluses paid into Social Security and other retirement trust funds under the custody of our Federal Government. These were categorically (and systematically) raided by Uncle $ugar and spent elsewhere. In the twilight hours of Congress in 2007, our elected officials passed a $550 BILLION omnibus (meaning all-inclusive plus the kitchen sink) spending bill. Appropriations for the defense/ war/ security funding garnered the headlines, but the bulk of monies in that all-inclusive bill went to PORK PROJECTS which have been dubbed “earmarks.” These are nothing more than a financially disastrous attempt to show that the incumbent mamas and papas are “bringing home the bacon,” and should therefore be returned to office come November. When I started writing this weekly column some four years ago, we required a daily infusion of a billion dollars of new foreign investment capital. Now it is 3 times THAT!
Explosion of our debts and deficits have taken a toll on the dollar. The US Treasury and Federal Reserve Bank’s solution is to create more liquidity by printing more money and lowering interest rates. This will only exacerbate the problem; the dollar will further decline and inflation will soar.Explosion of our debts and deficits have taken a toll on the dollar. The US Treasury and Federal Reserve Bank’s solution is to create more liquidity by printing more money and lowering interest rates. This will only exacerbate the problem; the dollar will further decline and inflation will soar. We will end up paying more for our (imported) energy and our food in 2008 because our dollars will only buy less. (Don’t expect to see the coming 20% to 25% jump in what we pay for energy and food to be reflected in the reported inflation rate(s). Energy and food are conveniently EXCLUDED from “core inflation!”)
I resolve to chronicle the forensic evidence behind these matters (and so many others) for my readers to consider in 2008. Rational thought and common sense can only prevail when (the court of) public opinion has the unvarnished truth and the un-spun/ un-hyped facts to evaluate. I wish you all a very pensive 2008. I’m Fred Cederholm and I’ve been thinking. You should be thinking, too.
Copyright 2007 Questions, Inc. All rights reserved. Fred Cederholm is a CPA/CFE, a forensic accountant, and writer. He is a graduate of the University of Illinois (B.A., M.A. and M.A.S.). He can be reached at firstname.lastname@example.org
Copyright © 2007 The Baltimore Chronicle. All rights reserved.
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This story was published on December 31, 2007.