Found Money
July 13, 2012 in Finance, United States
A few days ago, Foster Gamble, from the movie Thrive, posted this video.
In it, he talks about how Stockton, California recently went bankrupt in spite of having more than enough liquid assets to pay their bills.
Gamble asserts that a review of a government’s Comprehensive Annual Financial Report (CAFR) often reveals found money, in the form of restricted assets, that would solve self-proclaimed financial woes.
For example, Stockton had more than 600 million in assets, including 208 million in liquid assets, that would have been more than enough to make up for the 26 million dollar shortfall reported in the article linked here.
A couple days later, I was reading an online forum on this topic when I noticed someone from New Mexico, where I currently live, said they had downloaded the 2011 CAFR for the State. He also said it was long (more than 300 pages) and he didn’t understand the terminology.
I have worked as an accountant and tax preparer for almost twenty years, so I offered to help.
Benjamin emailed the document to me and I reviewed it.
I discovered that New Mexico, like Stockton, has significant net assets, including six billion dollars in funds that are held in permanent investments.
Being the curious sort, I decided to see if I could find a bottom line number for the state’s annual budget.
I did.
That’s right. New Mexico has enough funds held in permanent investments to run the state for an entire year.
It is possible I am missing a piece of the puzzle. The CAFR says these, “Nonexpendable restricted net assets are those funds that are required to be retained in perpetuity.”
The CAFR doesn’t say why the funds must be retained forever. It doesn’t say how to go about changing this requirement.
It is possible there may be a very good reason they are nonexpendable.
Or, it is possible they may be nonexpendable because they have been invested in private interests.
As I said, the CAFR doesn’t say.
What is apparent is that the State of New Mexico, like Stockton, California, has ample assets to avoid budget cuts and/or bankruptcy. My guess is that it would take only a few strokes of a pen and a vote of the legislature to release those funds.
Instead, those in power either are not aware of these resources or they have chosen to show the taxpayers only part of the financial situation so they may ask for more tax dollars.
As I have often said, the Universal Law of Abundance requires there to be enough for all. Nature demonstrates this through it generous provision.
The only reason we experience lack is because we resist generosity through the practice of hoarding.
It appears that some of the biggest hoarders and the least generous are our governments.
I wonder how we could peacefully go about accessing this found money.
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