Not To Worry, It Won’t Cost Anything!

 

The other day I surprised, or rather shocked, my wife by announcing that I just purchased a $100,000 Maserati Ghibli, loaded with so many extras that its dashboard could easily be confused with one aboard an F-22 Raptor fighter jet.

I calmly explained to her that its top speed approaches 180 miles per hour and can accelerate from zero to sixty in under 5 seconds. Terrific amenities if you are late for an appointment or need to be somewhere like yesterday.

“But how can we afford it?” she yelled at no minor decibel level.

Again, I explained that its already paid for, so it did not cost us anything.

“What? I don’t understand.”

I explained that I employed the same accounting principle that the President has applied to the cost of the hotly debated multi-trillion-dollar “Build Back Better” infrastructure plan. He assured a skeptical nation that it will be paid for by taxing the ultra-rich, so it will not cost anything. It’s paid for.

“I still don’t get it.”

Truthfully, neither do I.

As you may have guessed, I did not purchase a Maserati as our two Volkswagens service us just fine. Had I done so, I would have had to requisition a guest blogger for this space as I would have been busy recuperating at a local hospital, my limbs shattered by a well-aimed griddle pan.

But perhaps naively, I did think and hope we were finally rid of Enron-like accounting.

For those too young to remember, Houston-based energy behemoth Enron was once the 7^th largest company in the world with revenues in excess of $100 billion and a workforce of nearly 30,000. But “creative” use of mark to market accounting booking phantom revenue and shuffling billions in losses to off-balance sheet entities shielded and criminally misled employees and not coincidentally, Wall Street, of how dire the company’s financial condition was. It eventually led to the largest bankruptcy in the country’s history.

Bethany McLean and Peter Elkind’s outstanding tome “The Smartest Guys in the Room,” can explain the rise and fall of Enron in far better terms and detail than I can here, but I got no small sense of déjà vu about the accounting rationale for Build Back Better.

Whether this monstrous omnibus is $3.5T as the Democrats want or a “pared down,” $1.75T bi-partisan version, it would not be lost on the suspect math skills of a truant middle-schooler that it’s going to cost everyone – and a lot.

How much?

Once stripped of accounting gimmicks and augmented with $200 billion in debt-service obligations, the $3.5T proposed bill’s 10-year cost approaches $5.9 trillion. That means that America’s 143 million taxpayers are on the hook for $41,172 each. Perhaps I overlooked something, or I require a refresher tutorial on basic arithmetic, but $40,000 is a lot more than “nothing.”

As one Democrat legislator recently quipped,” We are just missing two things,” namely, “What exactly is going to be in the bill and how we’re going to pay for it. Other than that, we are good to go.”

Ah, and there goes my Maserati.