Thread by @JTLonsdale

1/ States and cities are hiding trillions in debt through accounting tricks that would land private sector CEOs in jail. Time to expose the scandal.

To stop crony leaders from hiding massive debts, the incoming administration might fix our misguided govt accounting standards.

2/ The system enabling the nonsense: GASB, which sets government accounting rules. Unlike strict business standards, GASB lets states:
- Report loans as "revenue"
- Hide most pension debt
- Use asset sales to fake balanced budgets

3/ Take CA. Newsom claimed a budget "surplus" — then used ~$15B of it for union pension debt that only exists because they’ve been obscuring the true cost of pension promises (100’s of billions of hidden debt) for decades.

4/ Or CA's managed-care tax scam: They tax health plans, use that to get federal Medicaid matching funds, then quietly return the money to plans. Result: $19.4B taken from federal taxpayers.

5/ Meanwhile, Oakland, CA, is trying to "balance" their budget by selling the Coliseum. One-time asset sale masquerading as sustainable revenue. Pure fiction.

6/ State/local govts spend trillions every year. When they hide true costs at the behest of plundering special interests, we get teacher layoffs, crumbling infrastructure, and surprise tax hikes — and a big bill coming due for our kids.

7/ The SEC would punish any company playing these games. We need a fix.

If the GASB is going to bother existing, it should do its job:
1) Force state/local accounting to pass the “common sense” bar and resemble private sector standards
2) Stop counting asset sales as revenue

8/ These two changes would expose trillions in hidden debt. That's why many bureaucrats, corrupt government unions, and other government cronies will fight so hard against reform.

We can’t let them win! I love seeing smart friends like Scott Bessent at Treasury; let’s fix this.